LONDON (AFP) - The European single currency struck a new nine-month peak against the dollar on Wednesday as investors snapped up riskier assets, reflecting mounting hopes for a global economic recovery.
The euro soared to 1.4714 dollars -- a level last seen in December. In late morning London trade it stood at 1.4699, up from 1.4658 in New York on Tuesday.
The yen meanwhile climbed after Japan's incoming finance minister reiterated that he is against intervening in the markets to curb the currency's strength.
The dollar dropped to 90.27 yen from 91.08 while the euro declined to 132.66 yen from 133.50.
On commodity markets, gold spiked back above 1,000 dollars per ounce. A struggling US unit makes dollar-priced gold cheaper for holders of stronger currencies, and therefore tends to boost demand.
The foreign exchange market was in dollar-selling mode, with a jump in US retail sales and steady commodity markets reducing the appeal of the safe-haven currency, said Masato Otsubo, currency analyst at Resona Bank.
"Cash had shifted from risk assets to the dollar," Otsubo said.
Traders were eyeing a historic change of power in Japan as the centre-left Democratic Party of Japan (DPJ) replaces a conservative party that has ruled almost continuously for more than half a century.
Hirohisa Fujii, a 77-year-old former bureaucrat tapped to be the new finance minister, said he opposed intervening in the currency market given the current economic situation, Kyodo News reported.
"The market consensus is that the DPJ will tolerate a strong yen," Otsubo said.
The current strength of the yen has dealt a heavy blow to the country's exporters. But Japan has not intervened in the currency market since March 2004, allowing the yen to find its own level against the dollar.
The DPJ "believes the currency values should be determined in a competitive, open marketplace based upon economic fundamentals," Tohru Sasaki, chief forex strategist for JP Morgan Chase Bank, told Dow Jones Newswires.
A DPJ-led government is unlikely to intervene in the market "even if the dollar breaks below 87 yen," he said.
The euro also found support after Germany's closely watched ZEW survey, which measures the mood of financial market players, rose in September to 57.7 -- its highest level since April 2006 -- from 56.1 in August.
In London on Wednesday, the euro was changing hands at 1.4699 dollars against 1.4658 dollars late on Tuesday, at 132.66 yen (133.50), 0.8915 pounds (0.8887) and 1.5187 Swiss francs (1.5167).
The dollar stood at 90.27 yen (91.08) and 1.0335 Swiss francs (1.0344).
The pound was at 1.6487 dollars (1.6489).
On the London Bullion Market, the price of gold rallied to 1,015.34 dollars an ounce from 996 dollars an ounce late on Tuesday.
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