Dollar falls to 14-month low vs euro

The dollar remains under broad pressure with investors emboldened to add to risk positions on solid company earnings, says Patrick Bennett.

The dollar fell to a fresh 14-month low against the euro in Asian trade Thursday as surging share prices spurred investor risk appetite.

The euro jumped to as high as 1.4961 in Tokyo trade -- its highest level since August 2008 -- up from 1.4922 in New York late on Wednesday. The European currency hit a three-week high of 133.80 yen, against 133.41.

The dollar edged up to 89.46 yen from 89.40.

Currency markets took their cue from strong gains in US stocks in response to positive corporate earnings results that encouraged investors to pour money into assets seen as likely to perform well as the global economy recovers.

The Dow Jones passed the symbolic 10,000 level on Wednesday for the first time since October last year, when markets were in freefall after the collapse of US investment giant Lehman Brothers.

'The dollar remains under broad pressure with investors emboldened to add to risk positions on solid company earnings' and expectations US interest rates will remain low, said Societe Generale analyst Patrick Bennett.

Market optimism was fuelled by better-than-expected earnings results from investment bank JPMorgan Chase as well as strong Chinese trade data.

The Australian dollar hit a 14-month high of 0.9225 US dollars, up from 0.9137, after the country's central bank chief Glenn Stevens signalled that further interest rate rises are likely to keep a lid on inflation.

The dollar was changing hands for 33.54 baht

Stevens "made it very clear" that the bank's emergency interest rate cuts would be reversed relatively quickly, Barclays Capital economists wrote in a note. Investors generally prefer currencies offering higher yields.

The Thai baht was under pressure a day after worries about the health of King Bhumibol Adulyadej sent stocks lower in Bangkok.

Thailand's royal palace said Wednesday that the revered 81-year-old monarch's lung infection was improving and his general condition was good, but he must stay in hospital.

- However, volatility (in the baht exchange rate) will likely remain in place as long the uncertainty is not completely lifted - Calyon analyst Sebastien Barbe wrote in a note to clients.

- The Thai political backdrop has been difficult for four years and the King has played a key role in capping political uncertainty. This is the reason why a hypothetical handover to the king's son could be challenging - he added.

The dollar was changing hands for 33.54 baht, up from 33.28 Thai baht in afternoon trade in Asia on Wednesday.

Against other Asian currencies, the dollar fell to 1,155.80 South Korean won from 1,166.25, to 1.3858 Singapore dollars from 1.3924 and to 9,315 Indonesian rupiah from 9,375. It declined to 46.31 Philippine pesos from 46.46 and to 32.21 Taiwan dollars from 32.24.