The euro remained strong against the dollar on Monday, touching a fresh 4-month peak before leveling off in mid-morning action.
Traders continued to bet the European Central Bank will respond to inflationary pressures by starting a cycle of tightening measures in April.
At the same time, the Federal Reserve in the U.S. is seen sticking to its controversial asset purchase plan and near-zero interest rates for what it has said will be “an extended period.”
The euro briefly broke above $1.42 this morning, its highest since November. A move above $1.4282 would take the euro to its highest since January 2010.
The euro was stuck in an unusually tight trading range against the yen, as traders waited for further action from Japanese officials who were forced into action last week to halt the rapid appreciation of the yen.
The euro was steady at Y115 today, having fallen as low as Y106.44 last week, before the G7 intervened to weaken the yen.
Versus the Swiss franc, the euro improved to CHF 1.2840, staying away from a record low of CHF 1.24 set a few months ago.
In economic news from the U.S., existing home sales were down 9.6 percent in February, well below expectations. An annualized rate of 4.88 million fell w short of estimates for 5.15 million.
On Wall Street, the Dow jumped back above 12,000. Meanwhile, crude prices rose above $102 on escalating violence in Libya.