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London -The euro rallied on Thursday to reach its highest level against the dollar in 8.5, months following a deal struck to raise the US debt ceiling and avert a default.
The European single currency jumped to $1.3668 - the highest level since February 1 and compared with $1.3560 late in New York on Wednesday.
"Dollar weakness has driven euro/dollar to new eight-month highs around $1.3668 as markets price in comments from global credit ratings agencies concerning the quality of US government debt in the aftermath of the debt ceiling debacle," CMC Markets analyst Matt Basi told AFP.
"The agencies themselves have done nothing to dispel accusations amongst many investors that they serve only as rear view mirrors, with most market participants able to decipher for themselves that when a government comes within hours of a default, their credit might not be as good as it used to be," he added.
The last-gasp plan extended the borrowing authority, but only until February 7. Lawmakers also reached agreement on funding the government through January 15.
