MercoPress. South Atlantic News Agency

Euro at its strongest against the US dollar for the first time since 2015

The Euro has strengthened as the Euro zone's economy improves and markets predict the European Central Bank could start to cut back quantitative easing

The Euro has hit US$1.20 for the first time since January 2015 as the prospect of a US interest rate rise recedes. Hurricane Harvey's impact has led analysts to assume the US central bank will not want to risk curbing economic growth and fears over North Korea's activities have unnerved investors.

 A rise in interest rates tends to draw investors to a currency, taking advantage of the higher returns. Meanwhile, the Euro has itself been gaining against a range of currencies. Against the dollar, it has risen by almost 15% so far this year.

The Euro has strengthened in recent months, as the Euro zone's economy improves and markets predict the European Central Bank could start to cut back the money-printing program it has been running to repair the ravages of the Euro zone crisis and credit crunch of the late 2000s.

The dollar was also undermined by Friday's annual meeting of central bankers at the Jackson Hole resort in Wyoming at which US central bank chief Janet Yellen's speech gave no hint that the Federal Reserve was planning any policy change that would support the dollar. At the same event, European Central Bank boss, Mario Draghi, did nothing to talk down the Euro.

Euro strength has left the pound at its weakest for almost a year. It buys 1.0759 Euros in the wholesale currency markets, making a euro worth a much as 92.95p.