The US dollar came under renewed selling pressure today as markets used the euro's overnight dip to buy into further gains and possibly try to break through its 1999 launch rate.
The euro hit fresh four-year highs yesterday but later eased after failing to break its $1.1747 launch rate and US Fed chief Mr Alan Greenspan soothed markets with optimistic comments about the US economy.
Dealers said the market needed a big push before breaking through the launch rate, knowing it would set off stop loss orders that could vault the single currency even higher.
"We did always expect it to be difficult to break through the birth rate, and we were never going to do it in one move. We've tried it three times now - it's a big psychological level, like parity," said Mr Aziz McMahon, foreign exchange strategist at ABN Amro in London.
By 10:30 a.m. the euro had pushed to the day's highs of $1.1700, two-thirds of a per cent up from its New York close but short of yesterday's four-year peak at $1.1745.
Earlier the euro came under mild pressure on worries the European Central Bank might unexpectedly cut interest rates at its regular mid-monthly meeting.
Some analysts were forecasting a reduction at its June meeting after recent poor German growth data.