Europe gets (even) more expensive

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That rebound in the dollar last week? Never mind.

The euro hit a record high of $1.583 today, up from $1.565 on Tuesday, on the heels of upbeat economic reports from Europe and more bad news on the U.S. economy. The euro’s strength means misery for any American in Paris this spring. A year ago, 1 euro cost $1.36; two years ago it was at $1.26.

Ashraf Laidi, chief foreign exchange strategist at CMC Markets in New York, says the euro’s momentum could take it to $1.60 by next week.

Europe’s economy is showing surprising resilience. A report today on German business confidence in March showed a third straight monthly rise. A French business confidence survey also posted an increase. The numbers suggest European interest rates will stay high relative to U.S. rates, in turn keeping the euro more attractive to yield-hungry global investors than the dollar.

Meanwhile, U.S. new home sales fell in February to the weakest level since 1995. The bigger surprise was the government’s report of a 1.7% drop in factory orders for big-ticket goods last month. Most analysts had expected orders to rise. The data are more evidence that the U.S. economy is either in recession or will be there soon.