LONDON: The euro surged on Wednesday to a 14-month peak above 1.49 dollars with the greenback hit by increased risk appetite and prospects of super-low US interest rates for some time amid rising economic confidence.

In late morning London trade, the European single currency jumped to 1.4913 dollars, which was last seen in August 2008. It later stood at 1.4906, up from 1.4852 dollars late in New York on Tuesday.

"I think 1.50 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 foreseeable 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."