LONDON, April 30: The euro raced up to a four-year high against the dollar on Wednesday on concerns about the health of the US economy.

The move by the euro above $1.11 stoked speculation that the European Central Bank (ECB) will soon move to cut interest rates to contain the rise of the euro-zone unit.

The single European rallied to 1.1132 dollars from 1.1073 dollars late on Tuesday in New York.

At one point the euro rose to as high as 1.1137 dollars, the highest level since February 1999, one month after its legal birth. The dollar was being traded at 119.44 yen from 119.82 late on Tuesday.

The dollar has depreciated against the euro through the key resistance level of 1.1084, the March intra-day high, as concerns over the outlook for the US economy continue to weigh on foreign exchange market participants’ minds, said Derek Halpenny, economist at Bank of Tokyo Mitsubishi.

Optimism after the stronger than expected consumer confidence data was tempered by speculation of a weak ISM survey and employment report, he added.

The ISM’s manufacturing index is due to be released on Thursday while the monthly US labour market figures are expected on Friday.

Analysts said that the euro could rise yet higher against the dollar, noting that the move came despite concerns about the strength of the euro-zone economies.

The ascent of the euro in the face of stronger US and weak euro area economic data, better than expected first-quarter corporate earnings reports and an improved tone in equity markets, is significant, ABN Amro analysts wrote.

With the stronger euro making life difficult from exporters in the euro-zone, economists said the ECB might be swayed into cutting interest rates in the near future to try to rein in the euro, though perhaps not as early as next week.

We maintain our view that in the wake of a strengthening euro, the ECB will have to respond with another 50 basis point rate cut, but it is now pretty clear that this will not happen as soon as next week, said Audrey Childe-Freeman, economist at Canadian Imperial Bank of Commerce.

Earlier in the day in Tokyo, the yen came under slight pressure after the Bank of Japan (BoJ) announced a further easing of monetary policy in an effort to support the weak economy, dealers said.

The central bank announced it would raise the level of reserves in the BoJ current account, funds which are made available to banks for lending, to around 22 trillion to 27 trillion yen (183 billion to 225 billion dollars).

The euro was changing hands at 1.1132 dollars from 1.1073 late on Tuesday in New York, 132.94 yen (132.60), 0.6942 pounds (0.6943) and 1.5127 Swiss francs (1.5074).

The dollar was being quoted at 119.44 yen (119.82) and 1.3586 Swiss francs (1.3617).

The pound was at $1.5948 (1.5938), 190.97 yen, unchanged from late on Tuesday, and 2.1663 Swiss francs (2.1703).

On the London Bullion Market, the price of an ounce of gold stood at $336.30 from 331.40 late on Tuesday. —AFP