The euro rose above $1.31 today for the first time as the US currency continued its retreat on concerns about imbalances in the American economy.
The single European currency rose as high as $1.3102 in late European trading, exceeding a previous record of 1$.3092 reached just hours earlier. Analysts said that the dollar's decline was part of a now well-established downward trend for the US currency.
The dollar has come under pressure again following comments from Federal Reserve chairman Alan Greenspan on Friday suggesting that a further depreciation in the US currency may be necessary to bring down the US current account deficit.
The dollar's sharp falls leave the market nervous about the potential for intervention by the European Central Bank or the Bank of Japan to prop up the dollar as their economies suffer from weaker exports.
But the weekend Group of 20 forum of finance ministers in Berlin ended with no sign of action to stem the dollar's slide, no hint of central bank intervention and no attempt by officials to 'talk up' the dollar.
The dollar's fresh weakness today came as markets braced for additional selling pressure from central banks said to be adjusting currency reserves to include more euros.
Reports that Russian deputy Finance Minister Alexei Ulyukayev is considering reviewing the share of euro the country holds in its currency reserves weighed on the dollar.
