Dollar hits new low against euro

BERLIN -- The US dollar slid to a new low yesterday against the euro, which rose to an all-time high of $1.3179 in late New York trading, breaking a day-old record as jittery markets kept up pressure on the US currency.

The recent rally has taken the euro from $1.20 about two months ago, driven by concerns over the US trade and budget deficits, which sent it above the $1.31 mark for the first time when it hit $1.3105 on Tuesday. The euro fell as low as 86 cents in February 2002 after debuting at $1.18 on Jan. 1, 1999.

The renewed euro surge over the past two days comes after a weekend meeting of the finance officials from the Group of 20 industrial and developing countries didn't signal concerted action to stop the euro's rise.

The spike in the euro has made American products less expensive overseas, but European leaders have begun to worry openly that it might damage their fragile export-driven economic recovery.

After the European currency broke the record yesterday, Chancellor Gerhard Schroeder told the German parliament that ''the euro absolutely concerns me, because of our exports."

The strong euro puts pressure on manufacturers of products like German luxury cars or French wines, whose dollar prices either have to go up or the companies have to live with lower profit margins.

The euro's current spike appears to be driven more by anti-dollar feeling in the markets than any one event, making it hard to say how long it will continue, said Dorothea Huttanus, an economist with DZ Bank in Frankfurt.

''There is nothing really fundamental; it's bad dollar sentiment," she said. ''Nobody knows how long this can last until we get a sharp reversal."