LONDON (AFP) - The euro extended gains against the dollar on Monday, looking set to test the key 1.50 dollars level again as investors took on more risk, pushing stock and commodity markets higher, dealers said.
They said there was some early caution that eurozone finance ministers might try to talk down the strengthening euro, which crimps exports, but by late trade this had faded and the dollar was once more on the defensive.
As investors gain confidence in the prospects for recovery from the worst global slump in years, they are looking for higher returns than are available on the traditionally safehaven dollar, they added.
In late London trade, the euro rose to 1.4947 dollars from 1.4903 dollars late in New York on Friday.
Against the Japanese currency, the dollar fell to 90.47 yen from 91.09 yen late on Friday.
Dealers said the euro was benefiting from the greater appetite for risk.
Last week, it hit 1.4968 dollars, its highest level in 14 months and appeared on track to breach 1.50 dollars before weak data and profit-taking saw the unit slip back.
Finance ministers from the 16 countries that use the euro were gathering in Luxembourg on Monday amid concern in the region that a strong currency could curb exports and hinder recovery.
"There is speculation that European officials may make comments to check the euro's strength," said Yuji Saito, head of foreign exchange at Societe Generale in Tokyo.
Dealers said remarks by Federal Reserve chairman Ben Bernanke had no immediate impact on trade.
The United States and Asia should work to avoid "unsustainable" imbalances in trade and capital flows that can destabilize the global financial system, Bernanke said.
Bernanke told a California conference on Asia and the global financial crisis that the United States needs to save more and most Asian economies need to boost efforts to spur consumption to achieve a better balance.
Dealers noted European concerns about the fall in value of the dollar, seeing in it a threat to European exports.
"If the euro's direction were to continue to move along the lines of recent weeks, there is a risk... that it could slow economic recovery in Europe," Jean-Claude Juncker, who heads the Eurogroup, warned on Friday.
In London late on Monday, the euro was changing hands at 1.4947 dollars against 1.4903 dollars late on Friday, at 135.22 yen (135.44), 0.9122 pounds (0.9109) and 1.5139 Swiss francs (1.5177).
The dollar stood at 90.47 yen (91.09) and 1.0128 Swiss francs (1.0179).
The pound was at 1.6388 dollars (1.6357).
On the London Bullion Market, the price of gold climbed to 1,054.50 dollars an ounce from 1,047.50 dollars an ounce late on Friday.
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