The US dollar remained under pressure on Thursday in reaction to stronger US stock markets. The single currency and British Pound reached their highest in last 16 months while Australian dollar also posted substantial gains.

The dollar index DXY which measures the US dollar’s performance against its six major rival currencies dropped to 73.815 on Thursday as compared to 74.384 on Wednesday’s North American trading session.

Head of forex strategy Kit Juckes from Societe General commented, “The dollar’s controlled decline is beginning to look messy, that’s bad for all of us, because we need neither a crisis of confidence in the Treasury market, nor a collapse of business confidence in export-sensitive sectors of the European economy.”

The euro reached its highest in 16 months to 1.4684 versus the greenback but later settled around 1.4610 as compared to 1.4511 on Wednesday’s late trading hours. The recent remarks of ECB president Jean Claude Trichet supporting interest rate hike up to 1.25 percent created a wave of optimism among investors.

Likewise the British Pound also gained to touch its 16 months highest at 1.6568 against the US dollar. The Pound Sterling later settled to 1.6551 as compared to 1.6405 on late Wednesday.

Currency strategist Adrian Schmidt from Lloyds TSB commented, “The dollar remains under pressure and there is little reason to expect a rally except for the possibility of position-squaring into Easter,” he further added, But if positions haven’t been unwound by the combination of the Japanese earthquake, the Middle East crisis and EU periphery concerns, it is hard to see why they should be unwound because of a long weekend.”

The dollar also fell versus the Japanese Yen to 82.01 as compared to 82.41 on Wednesday while the Australian dollar gained 0.7 percent to 1.0749 versus the greenback on Thursday.