The euro broke through the $1.60 mark this evening after European Central Bank governing council member Christian Noyer said policy makers will act to restrain consumer prices if inflation doesn't ease.
The dollar weakened against the euro after a US industry report showed sales of previously owned homes fell in March.
Strategists said this evening that they expect the euro to reach the $1.65 mark over the next three to six months.
At 5.24pm the euro was trading at $1.6002 and £0.80 against sterling.
