The euro has jumped above one dollar twenty for the first time since January 2015, just hours after North Korea fired a ballistic missile over Japan.
Traders say the single currency is increasingly looking like a safe haven. The dollar, less so.
Especially in the wake of Hurricane Harvey, analysts are assuming the US Federal Reserve will not want to risk hurting economic growth with an interest rate hike. Low rates make the currency less attractive to investors seeking high returns.
Meanwhile, the euro has been gaining against a range of currencies and is up nearly 15 percent against the dollar so far this year.
The rise was further encouraged when European Central Bank President Mario Draghi made no mention of the euro’s strength at a meeting of central bankers in the US state of Wyoming last week.
Still, some analysts were wary that the single currency’s latest rise would attract some attention from the ECB at a policy meeting next week.