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Euro advances for 7th day vs. dollar as short-term rates rise

Chung Sung-Jun - Getty Images

The euro rose for a seventh straight session against the dollar on Wednesday, driven by a combination of higher money market rates and a growing belief that the European Central Bank will keep interest rates low for some time but not cut them.

(Read more: Dollar to trade sideways, taper or no taper: charts)

In midday New York trading, the euro was up 0.2 percent against the dollar at $1.3794, after hitting a six-week high of $1.38. So far in 2013, the euro has gained 4.5 percent versus the greenback, on track for its best yearly gain since 2007.

Against the yen, the euro was down 0.2 percent at 141.18 yen. It was up more than 23 percent versus the Japanese currency so far in 2013.

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(Read more: Dollar-yen trade is back...and could be better than ever)

The dollar, meanwhile, slipped 0.1 percent against a basket of currencies to 79.85, and fell 0.5 percent versus the yen to 102.36.

The greenback has weakened in recent sessions on the view that the Fed will not reduce its economic stimulus until early next year. James Bullard, the St. Louis Fed president, however, has kept the window open for a small amount of tapering this month.

The Swiss franc, meanwhile, hit a seven-month high against the euro, which fell to 1.2201 francs. The euro was little changed at 1.2217 francs

(Read more: The dollar bulls are back with a bang)

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