Euro surge against dollar fuels rumours of ECB intervention

THE EURO surged against the dollar, leaping more than a cent to $1.0336, its highest level since early this month, triggering speculation of intervention by the European Central Bank .

The rise reversed a sharp fall in the wake of comments by senior European officials that dampened hopes the ECB would prevent the euro hitting parity with the dollar. The unexpected rise sparked rumours the ECB may have been involved.

"Our traders said the price action looks like it could have been intervention even though we have not seen anything," said senior economist Henry Willmore at Barclays Capital.

Neither the US Fed nor the ECB would comment on the rumours.The euro had earlier hit a lifetime low against the yen. It reached 121.01 yen, down 8.5 per cent since its 1 January launch, just days after hitting an all-time low against the dollar of $1.0104. The yen hit 119.93 against the dollar, its best since 18 June.

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