The US dollar hit new lows yesterday after US Treasury Secretary Steven Mnuchin said he welcomed its weakness and figures showed that the euro zone economy started the year at its strongest pace in over a decade.

Fear of protectionism from the US economy, the world’s largest, had already pushed the greenback to a three-year low, but Mr Mnuchin’s remark pushed it down further. It was down half a per cent against a basket of currencies in European trade.

Meanwhile, euro zone businesses enjoyed a much better start to 2018 than anyone polled by Reuters expected, ramping up THE activity at the fastest rate since the middle of 2006, a survey showed yesterday.

The euro touched a three-year high of $1.2356, the dollar fell below 110.00 yen for the first time since September and hit new three-year lows on a trade-weighted basis, while sterling was at its highest level against the greenback since the Brexit referendum vote in June 2016.

Fresh signs of growth in the developed world provided compelling alternatives for investors worried about the greenback.

Japan’s exports to China and Asia hit record levels as shipments rose for a 13th straight month in December.

The euro surge, meanwhile, comes ahead of today’s European Central Bank meeting, which is in focus following recent commentary that the central bank could change its policy guidance early this year. This after the euro zone’s economy outpaced that of the US in 2017 and shows further signs of strength in the New Year.

European shares were mixed, with a decline in utility stocks and tumbling tech stocks.

The dollar’s decline has been a boon to commodities priced in the currency, with gold edging up to $1,341.81 an ounce.

Oil prices were somewhat more subdued after jumping more than one per cent on Tuesday when Brent crude hit $70 a barrel for the first time in a week.

Brent futures was at $69.89, still not far off the three-year high of $70.37 reached on January 15, while US crude was higher 20 cents to $64.67 a barrel.