LONDON, May 9: The euro hit fresh stratospheric levels against the dollar on Friday, touching four-year-highs of $1.15 after the euro zone central bank hinted it was not yet worried at the currency’s strength.

The euro was being traded at $1.1505 against $1.1497 late on Thursday in New York, staying consistently above any level since January 1999, just after the currency’s launch.

The single European currency has now strengthened by more than seven percent since mid-April.

The dollar was being quoted at 117.30 yen against 117.00 yen late the previous day.

On Thursday, the European Central Bank (ECB) opted to keep the euro zone’s interest rates unchanged, with ECB President Wim Duisenberg additionally commenting that the bank did not consider the euro’s rise “excessive”.

This was the “catalyst” for the euro to go on the march again, said Bank of Tokyo-Mitsubishi analyst Derek Halpenny.

The monetary policy decision and the lack of concern over the appreciation of the euro were seen by the foreign exchange market as giving a green light to continued euro buying against the dollar, he said.

However there were a series of other factors conspiring to keep the US currency pushed downwards against its European counterpart, said BNP Paribas strategist Hans Redeker.

Among these was the suggestion Thursday by Malaysian Prime Minister Mahathir Mohamad that his country’s state oil company, Petronas, abandon the dollar in favour of the euro as its chosen trading currency.

This echoed similar comments from within other oil nations, said Redeker.

All in all, it could continue further, up to the 1.18 level for the euro-dollar. We are seeing a real over-shoot and there are a lot of funds out there in the market, he said.

Many traders had been caught out when a dollar rally they had assumed would follow the end of the US-led war in Iraq never materialised, leaving them grabbing at any chances to minimise their losses, he added.

Some funds are now having to buy every (euro) dip, meaning we are trading higher over all and with declining volatility.

The British pound was also taking a beating against the euro, despite Thursday’s Bank of England decision not to cut its own interest rates.

Overnight, sterling plunged to an all-time low against the euro of 0.7190 pounds, before recovering marginally.

The euro was changing hands at $1.1505 from 1.1497 late on Thursday in New York, 134.91 yen (134.45), 0.7178 pounds (0.7174) and 1.5083 Swiss francs (1.5089).

The dollar was being quoted at 117.30 yen (117.00) and 1.3117 Swiss francs (1.3123).

The pound was at $1.6022 (1.6017), 188.07 yen (187.39) and 2.1020 Swiss francs (2.1019).

On the London Bullion Market, the price of an ounce of gold stood at $348.15 from 346.45 late on Thursday. —AFP