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NEW YORK: The euro soared above 1.44 dollars on Monday, scraping an eight-month high, as a series of positive economic data in the US, Europe and China encouraged risk taking.
At 2100 GMT, the euro was changing hands at 1.4411 dollars, up from 1.4255 dollars late Friday in New York.
Earlier the single European currency jumped to 1.4445 dollars, its highest level since December 18, after a better-than-expected reading on US industrial activity.
Against the Japanese currency, the dollar climbed to 95.23 yen from the 94.69 yen reached late on Friday.
"In general there has been a turnaround in investors' sentiment," said Samarjit Shankar of Bank of New York Mellon.
"It is spreading into the currency market as well," he said, noting market participants were moving "away from the safety of the dollar," pushing up more profitable currencies, such as the euro.
A key US industrial indicator and manufacturing data from the eurozone added to confidence, after US economic growth data on Friday showed a narrower-than-expected 1.0 percent decline in output in the second quarter.
"Yet again the risk appetite trade is king within currency markets after Friday's better than expected US GDP numbers," said analyst James Hughes of CMC Markets, commenting on Monday's trading.
The Institute of Supply Management said its index of the US manufacturing sector rose to 48.9 percent from 44.8 percent in June.
That figure was better than the level of 46.5 percent expected on Wall Street and closer to the 50 percent level that separates expansion and contraction.
The euro is seen as a higher-risk investment than the dollar and tends to strengthen in times of increasing confidence.
"If we get further good news we could well see the euro/dollar break 1.45," said Shankar.
"But it's still early to say if it's going to be a sustainable trend because if at the end of the week there is a disappointment in the labour market data we could see the euro/dollar come back down."
The financial markets, which have been rallying on the back of positive economic data and corporate earnings, are braced for the US July unemployment figures due Friday.
There have been some recent signs of stabilisation in the US labour market, where the unemployment rate hit 9.5 percent in June, a 26-year high, amid a painful recession that began in December 2007.
An improvement in the labour market would be a key factor in getting consumers spending again, the main driver of activity in the world's biggest economy.
The US and European equity markets rallied Monday on the upbeat economic and corporate earnings news.
The London market was boosted by earnings news from the British banks HSBC and Barclays, which also strengthened the pound.
Manufacturing activity in the 16-nation eurozone rose to the highest level for 11 months in July, the purchasing managers' index by survey company Markit showed.
And manufacturing in China hit a 12-month high in July mainly driven by domestic demand, according to a leading independent index.
In late New York trading, the dollar fetched 1.0588 Swiss francs, compared with 1.0676 on Friday.
The pound was at 1.6933 dollars, up from 1.6708. - AFP/de
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