The euro shot to a three-year high on Monday as optimism around growth buoyed expectations of tighter monetary policy from European Central Bank, while the chance of a pro-European Union coalition in Germany also boosted confidence in the continent.
With the world in general and Europe in particular showing signs of sustained economic growth, global stock benchmarks jumped to new highs, even though investors are now pricing in the withdrawal of central banks’ stimulus.
That view was given further fuel last week by an account of ECB discussions that suggested policymakers may soon start preparing the ground for a reduction in support.
The single currency climbed as much as 0.8 percent to $1.22965 at one stage on Monday, a price last seen in December 2014, just before the ECB first announced its government bond purchase program.
In addition, Bank of Japan Governor Haruhiko Kuroda offered a positive view on his nation’s economy and inflation on Monday, sending the yen to a four-month high against the dollar.