The euro rose as high as $1.4881 before slipping back to $1.4866 in morning European trading
-- still well above the $1.4785 it bought in New York late Friday.
The British pound climbed to $1.9613 from $1.9573, while the dollar slid to 107.96 Japanese yen from 108.91 yen.
Last week, Fed Chairman Ben Bernanke said the U.S. central bank would act aggressively in confronting economic woes
-- signaling more interest rate cuts -- while the European Central Bank sounded a hawkish note on rates.
The Bank of England left its rates unchanged, but signaled a cut was likely in February.
Lower interest rates can jump-start a country's economy, but may weigh on the currency as traders transfer funds to countries where they can earn higher returns.
The Fed's recent interest rate cuts have weighed on the dollar, while the possibility of the ECB raising rates could further boost the euro. The 15-nation European currency reached an all-time high of $1.4967 on Nov. 23.
"Recent gains are again putting the 1.50 level back within reach," said James Hughes, a market analyst at CMC Markets.
"The ECB seem poised to hike interest rates and essentially anything that justifies this decision ... would without doubt make the euro an even more popular choice as investors look to avoid the greenback and pick up a decent yield at the same time," he added.
[Associated Press]
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