The euro yesterday reached a five-month high against the dollar and a 10-month high against the yen, fuelling optimism that the long-suffering currency has turned the corner.
The rally to a peak of $0.934 leaves the euro more than 10 per cent above its lows at the end of November.
Analysts said its revival was being fuelled by a belief in the market that European economies would be best placed to cope with an abrupt slowdown in the US economy.
Yesterday there were more signs of flagging growth in the US and Japan. A 0.8 per cent fall in Japanese industrial production in November underlined the recent slowdown in the corporate sector.
The Conference Board's US Index of Leading Indicators, a closely watched gauge of economic prospects, fell for the second consecutive month in November.
Earlier this week a downbeat trading statement from WalMart, the supermarket company, was taken as the first indication that US consumers had been relatively restrained in their spending this Christmas.
"There is no doubt that the European economies will feel the effects of a slowdown in world growth, but they are better placed to deal with the situation than either the US or Japan," said Mr Michael Lewis, senior economist at Deutsche Bank in London.
Europe has none of the structural imbalances which look set to plague the dollar or the yen over the coming year, he added.
Investors fear that as slowing growth takes the shine off US assets, the US will increasingly struggle to fund its bloated current account deficit. Japan too is thought to be ill-equipped to cope with slowing world demand. With government debt already at worrying levels and interest rates at 0.25 per cent, there is little it can do to boost the economy. "Japan is in a tight corner," said Mr Adam Cole, currency strategist at HSBC in London.
Consumers should use hoarded coins so they can be taken out of circulation when euro notes and coins are introduced in 2001, the Euro Changeover Board said yesterday.
Its chairman Mr Philip Hamell said about 550 million coins worth about £30 million were hoarded. "The message to everybody is to get these coins out of the jars and into circulation now."
