LONDON (AFX) - The euro continued to gain ground in early trade on dollar weakness related to accounting uncertainties among US corporates and some relatively positive economic news from the euro zone, dealers said. Rob Hayward, currency strategist at ABN Amro said the euro could rally up to 0.8870 usd over the next couple of days if it breaks through the 0.8730 barrier. He attributed the recent strength to two factors. "One is the move against the dollar, related to problems regarding US corporations and a growing belief that most of the good news on the economic front has been factored in," he said. The second is a better outlook for the euro, due to a coincidence of factors like better economic data and yesterday's decision by European Central Bank president Wim Duisenberg to stand down in July 2003. However, Hans Redeker, chief currency strategist at BNP Paribas, remains sceptical about the prospects of the euro zone economy. "It would be heroic to assume that Europe will generate growth momentum independently," he said. There is no fiscal support and monetary policy remains tighter than elsewhere, he said. Nevertheless, the euro could gain some ground over the next couple of trading sessions on a sudden change in portfolio flows as a result of accounting problems brought on by the collapse of Enron. He noted that there's been a sharp sell-off in junk bond markets and lower quality paper. "This is a normal technical correction," he said. "In next few months, the US asset markets will be investors' darling." The G7 meeting this weekend is unlikely to influence matters too much and a communique reference to currency levels is unlikely, he said. However the US may moan a little about the lack of pace of structural reforms in Japan, he added. The decision by the Bank of Japan to leave monetary policy unchanged failed to excite though the recent improvement in banking shares as a result of proposed equity purchases by the Bank of Japan has lifted the yen. Meanwhile sterling was much weaker, partly because of the euro's continuing appreciation, but ABN's Hayward suggested that this morning's opinion poll by ICM for No, the anti-euro campaign, hasn't helped matters. According to the poll British entry into the euro zone is hardening. It found that the majority against British membership had risen to 60-27 compared with 56-31 only a month ago.