Euro rises in London

The euro rose to a three-week high against the dollar on Thursday, swept higher by month-end demand which helped it extend a rally after Greece moved a step closer to securing international aid. The single currency was also buoyed after comments from European Central Bank President Jean-Claude Trichet reinforced speculation that the ECB will raise interest rates next week, helping it to a 15-month high versus sterling.
Markets cheered the Greek parliament's passage of tough austerity measures on Wednesday, enabling the debt-stricken country to secure more emergency funding from the EU and the International Monetary Fund and staving off the threat of a debt default for now. The euro hit a high of $1.4522 versus the dollar on trading platform EBS and analysts said further gains could propel it towards $1.5000. However, many remained wary about whether Greece will be able to implement such harsh measures and expected the euro's rise to be limited.
It failed to sustain a move above $1.4500, with traders saying demand from a semi-official European name and model funds ran into offers from sovereign names ahead of a reported options barrier at $1.4550. It was last up 0.2 percent at $1.4460 against the dollar, with bids in the mid-$1.44 region seen as acting as support. ETX's Wiltshire said the euro's gains were helped by hefty month-end buying of euro/sterling, some of which could reverse on Friday or next week.
The single currency was up 0.5 percent against the pound at 90.30 pence, having hit a 15-month high of 90.70 pence. Bolstering the euro was the view that the European Central Bank will raise interest rates by 25 basis points to 1.5 percent next week, which would increase the single currency's rate advantage over the dollar. Gains in the euro and other currencies considered higher risk, including the Australian and New Zealand dollars - the latter hitting a post-float high in earlier trade - knocked the dollar lower versus a currency basket. The dollar index traded 0.25 percent lower as 74.503, having hit 74.255, its weakest since mid-June. It slipped 0.4 percent on the day to 80.40 yen.