A move by key central banks to aid Europe’s struggling banks gave a solid boost to the euro Thursday.

The euro climbed more than one US cent during the day to stand at $US1.3882 at 2100 GMT (0700 Friday AEST) up from $US1.3750 late Wednesday.

The common European currency hit a high of $US1.3931 after the European Central Bank announced it would, in cooperation with the central banks of the United States, Britain, Japan and Switzerland, provide three-month dollar loans to European banks.

The move came after dollar liquidity appeared to be drying up for Europe’s banks, with lenders worried about their exposure to the debt of Greece and other European sovereign borrowers that markets view as high-risk.

That also followed Wednesday’s tentative vote of confidence in Greece by the leaders of France and Germany, who said they believed Athens would hold its place in the eurozone.

“The US dollar sold off against all of the major currencies and its performance along with the rise in equities and slide in gold prices are clearly a reflection of optimism,” said Kathy Lien of currencies specialist GFT.

“Rather than alienate and criticize Greece for struggling to achieve their deficit reduction targets, Germany and France have put forward a united front that has made everyone feel less worried about a Greek default.”

The euro picked up against the other major currencies, while the dollar eased.

The US dollar was at 76.66 Japanese yen, down from 76.64 yen late Wednesday, and at 0.8689 Swiss francs, compared to 0.8760 francs.

The British pound gained to $US1.5802 from $US1.5765.