LONDON (AFP) - The European single currency leapt above 1.50 dollars here on Wednesday, hitting a 14-month peak, as the safehaven dollar was hampered by global economic recovery hopes and super-low interest rates.
In late afternoon trade the euro surged as high as 1.5005 dollars, which was a level last seen on August 11, 2008, extending its recent rally as investors sought higher returns than those available on the US unit.
Economists warned the latest bounce in the euro could derail a fragile economic recovery across the eurozone.
In recent days, weeks and months, the dollar has nosedived as buoyant global equities persuaded many investors to pull their cash out of the dollar and into assets that are deemed a riskier bet -- like the euro.
This week, a raft of positive US company results has helped propel global stock markets even higher, sparking hopes of a speedy global economic recovery after a fierce recession.
Wall Street resumed its rally Wednesday as the market focused on earnings from the banking sector that were better than expected, shaking off a disappointing quarterly report from Boeing.
At 1425 GMT, the Dow Jones Industrial Average traded up 51.17 points (0.51 percent) to 10,092.65, rebounding from losses on Tuesday.
The New York stock market reacted to news of record profits for banking giant Wells Fargo and positive earnings for Morgan Stanley after three consecutive quarterly losses.
At the same time, the dollar has also suffered from the prospect that US interest rates will remain ultra-low for some time yet.
Low interest rates in the United States have encouraged investors to borrow the dollar to invest in higher-yielding assets such as the euro.
Earlier this week, European finance ministers had voiced concern about the strength of the euro and the weakness of the dollar, which they argue is hurts their exporters and hampering economic recovery.
"The strength of the euro against the dollar heightens concerns about the strength and sustainability of the eurozone recovery," said IHS Global Insight economist Howard Archer.
He added: "The most obvious losers from a euro trading at 1.50 dollars will be major eurozone exporters to the United States, and to countries whose currencies are linked to the dollar, as they will obviously find their competitiveness impaired.
"This is at a time when global economic activity and trade is still fragile, with relapses a serious risk."
Since the start of March, the shared European currency has now surged by almost 20 percent in value against the greenback.
In addition, the dollar has also slumped on heightened speculation that the greenback may lose its role as the world's leading reserve currency.
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