Euro heads towards $1.50 before key meet

LONDON — The euro headed toward 1.50 dollars on Monday as European officials may seek to talk down the European single currency's recent strength at a meeting due later in the day, dealers said.

In London morning deals, the euro rose to 1.4928 dollars, from 1.4903 dollars late in New York on Friday.

Against the Japanese currency, the dollar fell to 90.52 yen from 91.09 yen late on Friday.

"The euro has been creeping higher again ... despite a push below 1.4850 dollars overnight on fears that European officials may speak out against the euro's strength," said Jane Foley, an analyst at currency traders Forex.com.



Finance ministers from the 16 countries that use the euro were due to gather in Luxembourg on Monday amid concern in the region that a strong currency could curb exports and hinder an economic recovery.

"There is speculation that European officials may make comments to check the euro's strength," said Yuji Saito, head of foreign exchange at Societe Generale in Tokyo.

The euro touched a 14-month high of 1.4968 dollars last Thursday, having risen around 18 percent against the dollar since March.

Investors were also cautious as Federal Reserve chairman Ben Bernanke was to deliver a speech in California on Monday, traders said.

"He may say again that a strong dollar is in America's national interest. It's a repeated remark which we call a mantra ... but it could still move currency rates when the market is in a dollar buy-back mood," Saito said.

Meanwhile the spluttering economic recovery in Europe is endangered by a dive in the value of the dollar which experts warn Washington covets in order to lower debts to China and boost exports.

"If the euro's direction were to continue to move along the lines of recent weeks, there is a risk ... that it could slow economic recovery in Europe," Jean-Claude Juncker, who heads the Eurogroup, said on Friday.

While Luxembourg Prime Minister Juncker said he was "not too worried" by the euro's present level, still below the 1.60 dollars it hit in July 2008, his remarks came on top of European Central Bank president Jean-Claude Trichet's warning that excess exchange-rate volatility is an "enemy" of stability.

In London on Monday, the euro was changing hands at 1.4928 dollars against 1.4903 dollars late on Friday, at 135.12 yen (135.44), 0.9173 pounds (0.9109) and 1.5146 Swiss francs (1.5177).

The dollar stood at 90.52 yen (91.09) and 1.0145 Swiss francs (1.0179).

The pound was at 1.6276 dollars (1.6357).

On the London Bullion Market, the price of gold climbed to 1,055 dollars an ounce from 1,047.50 dollars an ounce late on Friday.