Euro Has Best First Quarter as Trichet Transforms Into Hawk

The euro, seen as a potential failure 10 months ago, had its strongest start to a year on record as German growth accelerates and policy makers prepare to boost interest rates.

The currency appreciated 3.5 percent through March, the most since the final three months of 2008 and the best first-quarter performance since the region’s single currency began trading in 1999, according to Bloomberg Correlation-Weighted Index data. It rose from its lowest level since 2002 in January as German Chancellor Angela Merkel and French President Nicolas Sarkozy said they would do whatever is needed to support the 17-nation monetary union.