London - The euro firmed above $1.17 on Wednesday after hitting yet another four-year high as dealers awaited a possible hint from US Federal Reserve chairman Alan Greenspan that a US interest rate cut is imminent.
The single European currency stood at $1.1719 against $1.1704 late on Tuesday, after hitting $1.1745 overnight, its highest level since early 1999 just after it was first launched.
The dollar traded at ¥116.59 from ¥116.70 late on Tuesday.
After a slight respite "the dollar is back under pressure," said ABN Amro analyst Aziz McMahon, adding that the euro might face some resistance getting above levels near $1.1750.
"However these are not expected to do anything more than slow upside progress," he said.
Most traders were awaiting Greenspan's testimony to a Congressional committee later Wednesday on the state of the US economy, which they were set to scour for new hints on a potential interest rate cut at the next meeting of the Federal Reserve Open Market Committee (FOMC).
"We believe Greenspan will reinforce the belief that monetary easing is likely after the next FOMC meeting on June 25, which will ensure that the current trend of dollar depreciation will continue," said Bank of Tokyo-Mitsubishi economist Derek Halpenny.
On Monday, for the first time in four years the euro rose above $1.1665, the level at which it was initially fixed ahead of its debut on the currency markets in January 1999.
Now the euro's all-time high against the dollar, reached soon after its launch, looked on the cards, Halpenny added.
"A breach of $1.1885, the January 1999 intra-day high, looks likely in the coming days," he said.
The dollar's weakness, prompted in the main by recent comments from US Treasury Secretary John Snow indicating Washington is unworried by its decline, has sent the yen soaring against the US currency.
However this is being kept partly in check by widespread assumption that the Bank of Japan has been intervening to keep the yen down.
The euro was changing hands at $1.1719 from $1.1704 late on Tuesday in New York, ¥136.63 (¥136.57), £0.7140(£0.7128) and 1.5093 Swiss francs (1.5116).
The dollar was being quoted at ¥116.59 (¥116.70) and 1.2880
Swiss francs (1.2914).
The pound was at $1.6416 ($1.6409), ¥191.35 (¥191.49) and 2.1143 Swiss francs (2.1191).
On the London Bullion Market, the price of an ounce of gold stood at $365.85 from $366.30 on Tuesday afternoon. - Sapa-AFP