The euro climbed to a record high level of $1.3042 this morning as markets remained concerned by the large US current account and budget deficits.
Last week, the euro breached the $1.30 level for the first time in its history. The single European currency touched $1.3005, though it quickly fell back to $1.2965.
Dealers are worried about how the US will attract the necessary capital from abroad to fund the deteriorating trade balance and budget deficit.
The fear is that overseas investors might lose confidence in the debt-ridden US economy, placing their money elsewhere.
Analysts say market concerns about the deficits have increased in the wake of US President George W Bush's re-election win two weeks ago.
