Euro soars over dollar as risk appetite returns

The euro leapt above $1.48 in choppy trade yesterday as rising economic confidence whetted investors' appetite for the riskier-seeming European single currency over the safe-haven dollar.

In late afternoon trading in London, the euro was changing hands at $1.4833 compared to $1.4771 late on Monday.

The euro had peaked at $1.4876 earlier in the trading day - its highest level since August 2008.

The euro rose to 133.06 Japanese yen from 132.75 yen previously, while the dollar also fell against the Japanese currency, to 89.73 yen from 89.85 yen.

In commodity trade, gold hit a record high $1,068.63 dollars an ounce. The weak greenback makes the precious metal cheaper for investors holding other currencies, thereby boosting demand, traders said.

The euro earlier in the day fell as low as $1.4762 after publication of Germany's ZEW survey which showed that Europe's top economy was recovering but warned any upturn would be gradual and the road to recovery bumpy.

In Britain, the pound fell against rival currencies after official data showed that the annual inflation rate slid to 1.1 per cent in September, the lowest level for five years, as energy prices steadied.

Consumer Prices Index (CPI) annual inflation - the government's target measure - was 1.1 per cent in September, down from 1.6 per cent in August.

On the London Bullion Market, the price of gold fell to $1,057.50 dollars an ounce from $1,058.75 an ounce late on Monday after peaking at $1,068.63.