LONDON, June 12: The euro topped $0.95 on Wednesday for the first time for 18-months as sentiment soured again towards the US unit, fuelling speculation that the euro-zone unit might regain parity against the dollar.

The single European currency rode up to 0.9503 dollars, slipping later to $0.9484, against 0.9479 earlier on Wednesday in Tokyo trading.

The dollar was changing hands for 125.46 yen, against 125.43 in Tokyo.

The US currency found itself on the defensive again after US equity markets racked up new losses overnight amid concern about prospects for the US economy and the threat of renewed terrorist attacks.

Over the last couple of months or so there has definitely been a reassessment about the dollar and its fundamentals, and obviously there’s a huge about of event risk that’s in the market from terrorism etc, said Commerzbank economist Kamal Sharma.

There’s still persisting concerns that the US economy is not going to be as strong in the second half of the year as the market had anticipated, he added.

In the past the US has had this role as a safe haven, said Standard Chartered economist Daniel Hanna.

People always thought the US would do better, but it’s lost that. People are now keeping their money at home, he told AFP.

That has put US stock markets on a rollercoaster ride and has prompted investors to rethink their long-time love-affair with the dollar.

Battling against a seemingly unstoppable US currency, the euro lost almost a third of its value against the US unit from its launch in January 1, 1999, at around $1.17.

But after falling to an historic low-point of $0.8230 in October 2000, the single European currency has started to claw its way back in recent weeks, raising expectations that it might even regain parity againt the dollar.

We think long-term that the euro is going to continue to strengthen said Hanna. The dollar has turned.

I think it (the euro) could get to parity. When it gets to parity I think is the critical question. I don’t think we’re quite there yet, he told AFP.

Sharma expects the dollar to fall by around 4.0 per cent on average against other leading currencies.

So it’s quite conceivable that the euro will move towards this parity level, he told AFP, predicting that the euro would move up to around 0.98-0.99 dollars.

The euro was being traded at $0.9484 against 0.9482 late on Tuesday, 119.06 yen (118.79), 0.6440 pounds (0.6441) and 1.4776 Swiss francs (1.4749).

The dollar was worth 125.46 yen (125.27) and 1.5573 Swiss francs (1.5552).

The pound was at 1.4736 dollars (1.4715), 184.87 yen (184.38) and 2.2947 Swiss francs (2.2886).

The price of gold on the London bullion market rebounded to $319.50 an ounce from $316.80 late on Tuesday.—AFP