Following calls for parity against the dollar just a few months ago, the single currency is now one of the few assets in the world rallying.
Global stocks had their worst week of the year last week and the only assets to perform well were the traditional “flight to safety” assets, such as the Swiss franc, U.S. Treasurys and gold.
However, the euro has proved the surprise outperformer, appreciating 4.5 percent against the U.S. dollar in the last two weeks. It continued to gain on Monday, rallying 1.35 percent higher against the greenback at around $1.1552 in afternoon London trade.
Analysts attributed the strong performance to waning fears about European economies, with one saying the euro was demonstrating “safe-haven” qualities.
Senior foreign exchange strategist at Rabobank, Jane Foley, said that shorts on the euro (bets that the currency will weaken) had been slashed of late.