US dollar slides against euro

Chicago (Oct 25) The euro traded at $US1.3798 around 2100 GMT on Thursday (0800 AEDT Friday), up from $US1.3776 at the same time on Wednesday.

Earlier the euro hit a peak of $US1.3827, its highest level since early November 2011.

The US dollar slipped against the Japanese currency, to Y97.29 from Y97.39, while the euro rose to Y134.26 from Y134.16.

"The greenback continues to suffer from the view that the Federal Reserve will not begin reducing monetary stimulus before sometime around the end of Q1 2014," said Omer Esiner of Commonwealth Foreign Exchange.

"As expectations for monetary normalisation get pushed further out into the future, the dollar will remain increasingly vulnerable to selling pressure," he said.

The euro pared its gains after the closely watched Markit Economics' purchasing managers index (PMI) showed eurozone business activity slowed in October to 51.5 points from a 27-month high in September of 52.2.

Despite the poor data, "the euro is still looking impressive against the dollar and is being supported by a view that the US Federal Reserve is now not likely to taper (its stimulus) until 2014", said Currencies Direct dealer Phil McHugh.

Christopher Vecchio, currency analyst at DailyFX, said that signs of slower growth in the single-currency bloc have had a minimal impact on the euro.

"It seems that market participants are charmed by the notion that the eurozone isn't falling back into recession despite little substantive policy action over the past several months, by either fiscal (individual governments) or monetary (European Central Bank) policy," Vecchio wrote in a research note.

The US dollar dipped against the British pound, which bought $US1.6198 compared with $US1.6163 on Wednesday.

The greenback was unchanged at 0.8924 Swiss francs.