LONDON, ENGLAND - The euro surged Wednesday to a 14-month peak above 1.49 US dollars, as the greenback was hit by rising economic confidence, increased risk appetite and the prospect of super-low US rates for some time.

In early morning London trade, the European single currency jumped to 1.4905 dollars, which was last seen in August 2008. It later stood at 1.4889, up from 1.4852 US dollars late in New York on Tuesday.

"I think 1.50 US dollars is the next target and we will probably see it very soon," said GFT Global Markets analyst David Morrison.

He added that traders also believed that the US Federal Reserve would keep US interest rates close to zero for the forseeable future.

"Investors are focussed on belief that Fed will keep rates unchanged for a long time yet," Morrison said.

"Also, whatever Fed and US Treasury say, the market believes that US administration is happy to see dollar weaken. They just want to make sure it does it gradually." --AFP