Expectations that the ECB will further boost rates next year from the current 3.5 percent helped the euro to find favour. "It is easy for investors to chase the euro as it is clear that the currency's yield will continue to rise," said Nobuo Ibaraki, forex manager at Nomura Trust and Banking. The euro has risen 11 percent against the dollar and 12 percent versus the yen this year, aided by stagnating rates in the United States since mid-year and prospects for only a gradual rise in Japanese rates from the current 0.25 percent. Despite expectations that the Bank of Japan will bump rates up to 0.5 percent before the end of March, few in the market believe the yen's yield disadvantage will shrink quickly. Investors' demand for higher-yielding currencies buoyed the Australian and New Zealand dollars on Friday. The Aussie struck a fresh 9-1/2-year high against the yen , while the kiwi scaled a one-year peak against the yen and matched a one-year high versus the dollar hit on Thursday. Sterling hovered close to eight-year highs against the yen . Expectations in the market that the Bank of England may push rates higher in 2007 has helped sterling climb 14 percent against the dollar this year. Earlier, the price quote had indicated that the Chinese yuan had reached parity with the Hong Kong dollar for the first time since 1992.