Euro rises above $1.22 for first time in more than two years

LONDON: Strong euro zone survey figures and hopes of progress on Brexit negotiations pushed the euro above $1.22 versus the U.S. dollar on Wednesday for the first time since April 2018.

The euro has been gaining since the European Union announced a recovery fund in May, rising nearly 13pc since then.

Economic activity data in recent months have also boosted bets that Europe is outperforming the U.S.

Those expectations got a further boost with manufacturing survey data from Germany and France indicating that Europe's biggest economies may be recovering quickly.

Against the U.S. dollar, the euro rose 0.4pc to $1.22065, putting it on track for its biggest annual rise since 2017.

"European PMIs, Brexit and a likely dovish Fed is boosting risk appetite in the currency markets," said Kenneth Broux, a strategist at Societe Generale in London.

The European Union's chief executive said she could not say whether the EU and Britain would reach a trade agreement, but progress had been made and the next few days would be critical.

Investors are also keeping an eye on the outcome of a two-day Federal Reserve policy meeting on Wednesday. Policymakers are expected to keep the overnight interest rate near zero and signal it will stay there for years to come, a decision that analysts say will further boost risk sentiment.

"There's a feel-good momentum in the market," said Bart Wakabayashi, Tokyo branch manager of State Street Bank in Tokyo.

The dollar index, which measures the U.S. currency against a basket of currencies, was last at 90.127, a level not seen since April 2018.

The Australian dollar was little changed at 75.75 U.S. cents AUD=D4, nearing a two-and-a-half-year high of 75.780 it reached on Monday.