The US dollar surged to a two-month high versus the euro this afternoon amid a continued climb in US bond yields and broad strength in stocks. In addition, comments from a European Union official suggesting the economic outlook in Europe has worsened contributed to dollar strength. By 1615, the euro/dollar rate had tumbled 1.2pc to USD1.1351, recovering slightly from a two-month low of around USD1.1333 hit earlier in the session.
The euro's break below support at the USD1.1375 to USD1.1400 level is seen by analysts as signalling another bearish omen for the single currency. In the equity market, the Dow industrials powered up 1.9pc and the Nasdaq Composite surged 2.6pc to a 14-month high in early deals on expectations of a strong second-quarter reporting season. EU monetary affairs commissioner Pedro Solbes weighed on the euro after he said over the weekend that the Eurozone economy might only grow 0.7pc in 2003, versus prior European Commission forecasts of 1pc. //www.fxcentre.com