THE recovery of the euro continued unabated yesterday with the European currency hitting a six-month high against the US dollar.

In early trading, the euro was 95.95 cents, although by lunchtime it had fallen back to around 95.41 cents.

Economists said the latest surge was a combination of the currency cashing in on continuing concerns about the slowing of the US economy, as well as worries about a recession in Japan.

Neil Parker, economist at the Royal Bank of Scotland, said the euro had been close to breaking through the 96 cents barrier, which has been a resistance line for the currency.

Nevertheless he predicted it would still find it hard to reach parity with the US currency.

"I think we will see the euro struggle to make these gains," he said.

This was partly because much of the rise had been the result of the weak economic picture coming out of the US rather than because of improved sentiment towards the euroland currency, he said.

In October, the euro slumped to a record low against the US dollar, falling below 83 cents.