Investors now await Mr Trichets testimony before the European Parliaments Committee on Economic and Monetary Affairs at 1400 GMT. Todays focus is on Mr Trichet. The euro broke through major resistance at $1.1798 and the next key level is $1.1833, said Monica Fan, head of global FX strategy at RBC Capital Markets.
But with Euribors having sold off on Friday after Mr Trichet comments it will be difficult to pierce that level, she added. Markets have fully priced in a 25-bps rate rise at the ECBs next meeting on Dec 1 to 2.25% from an historic low of 2.0% which has been held since mid-2003. By 0900 GMT, the euro was up 0.4% at $1.1812 and gained nearly a third of a percent against the yen at 140.56.
The euro rose nearly a full US cent on Friday after Mr Trichet suggested the central bank would raise rates in Dec. The rally in the euro (since Friday) has been limited as a Dec rate hike by the ECB has already been pretty much factored into market pricing, UBS said in a research note.