RTTNews - The euro topped 1.400 against the U.S. dollar for the first time in nearly five months as traders bet the global economy is improving, adding to risk appetite. The single currency reached a 10-day high against the yen and leveled versus the pound.

The euro continued to rally against the dollar and reached 1.4035, its best level since Dec. 30. There was no major economic news in the U.S. as traders looked ahead to a holiday weekend.

The euro remained steady with the British pound after edging above a recently-seen 3 1/2-month low. The European currency is moving near 0.8800 after hitting as low as 0.8721 earlier in the week.

The British economy shrank 1.9% in the first quarter compared with the previous quarter, un-revised from the previous estimate released on April 24, the Office for National Statistics reported. This was the largest decline since the third quarter of 1979.

The euro climbed to a 10-day high against the Japanese yen of 132.53 on Friday. The rally has taken the euro above a near-term trading range.

At the end of two-day policy meeting, the Bank of Japan unanimously decided to maintain the uncollateralized overnight call rate at 0.1% as expected. The previous change in interest rates was a 20 basis point cut implemented in December 2008.

The BoJ assessed that economic conditions have been deteriorating, but exports and production are beginning to level out. Looking forward, exports and production are expected to start recovering despite the continuing weakness in domestic private demand. The pace of deterioration in economic conditions is likely to moderate gradually, leading to a leveling out of the economy, the central bank said.

On a light economic day in the Eurozone, data released by statistical office Istat showed that Italian retail sales rose 0.1% month-on-month in March following revised 0.9% contraction in February. Meanwhile, economists had forecast a 0.2% decline. On an annual basis, sales fell 5.2%, quicker than a revised 4.7% decline in the previous month and a 0.9% drop economists expected.

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