Euro nears three-year high

Friday, Jan. 10, 2003 | 9:54 a.m.

LONDON -- The euro approached a three-year high against the dollar in European trading this morning.

The euro hit $1.0509 in morning trading in Europe. It has hit a series of multiyear highs over the past weeks, driven by war worries and questions about the U.S. economy and stock markets rather than investors' optimism about the European economy.

When investors move out of U.S. stocks, bonds and other assets into those denominated in other currencies, they must sell dollars to do so -- driving down the dollar's exchange rate.

The consequences include more expensive European imports and vacations for U.S. consumers, but better conditions for U.S. manufacturers against their European competitors.

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