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The euro touched a fresh two-month high versus a broadly weaker dollar
on Friday as rising European money market rates continued to underpin
the shared currency, bringing large option barriers into play.
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The dollar stayed pressured, slipping to two-month lows versus a
currency basket, after a series of U.S. data this week underscored a
slackening in the economy's recovery.
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"The euro's going up on light volume, there's not much liquidity today
but European yields are rising and that's helping to drag the euro
higher," said Paul Mackel, director of currency strategy at HSBC.
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The recent rise in euro-priced bank-to-bank lending rates picked up
pace on Friday, pushed on by the sharp drop in spare European Central
Bank cash in money markets.
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The euro has risen more than 9 percent from a four-year low hit on June
7 after smooth government debt auctions in Greece, Portugal and Spain
eased concerns about the euro zone's sovereign debt problems.
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