Euro continues to gain ground

The euro benefits from other countries' problems

The euro rose sharply against other major currencies when the markets opened after the Christmas holidays.

At its peak on Wednesday, the euro had climbed by 10% in a month against both the dollar and the Japanese yen.

The euro reached its highest level in 10 months against the yen, and its highest level in five months against the dollar and against sterling.

"The dollar and the yen are weakening and the euro is going up against those currencies," said Steve Barrow, currency strategist at Bear Stearns in London.

"That is more a reflection of things going wrong elsewhere rather than things going right in euroland," he added.

In Japan, there are growing fears of a recession.

In the US, economic growth is slowing.

But the European central bank president Wim Duisenberg told German daily newspaper Börsenzeitung that he is convinced the rebound will continue.

Risks to price stability in the euro currency zone are currently decreasing as the oil price is coming down, Mr Duisenberg told the paper.

At its peak on Wednesday, one euro was worth 106.55 yen, or $0.9341.

The euro then fell back slightly as many traders pushed the sell-button to realise profits they had made during the euro's rally.

The euro bought 0.9315 dollars and 106.30 yen in late trading