LONDON (AFP) - The euro hit fresh eight-month high points against the dollar, which slid also against the yen on worries about the US economic outlook amid a widening American trade deficit.
The single European currency rose Thursday to 1.2629 dollars in early European trading against 1.2585 overnight in New York.
The dollar fell to 107.67 yen from 108.20 on Wednesday.
The euro rose to as high as 1.2652 dollars earlier Thursday, the highest level since February.
The dollar has fallen strongly, particularly against the euro, since late last week, largely in the wake of data showing a widening US trade deficit.
The greenback tumbled also against the yen, plumbing three-month low points, despite resurgent oil prices and a steep fall by Tokyo's benchmark Nikkei-225 index, dealers said.
Being a net importer of crude, the yen generally suffers when oil prices surge but the Japanese currency appeared cushioned by the dollar's woes.
"The dollar fell through the 108 (yen) level... with market participants maintaining a bearish view on the dollar following the breakout from well-worn trading ranges last Friday," Bank of Tokyo-Mitsubishi economist Derek Halpenny said.
"Economic slowdown in the US due to rising oil prices, current account deficit funding concerns and uncertainty ahead of the US presidential election on November 2 remain the key factors dampening sentiment."
Earlier this month, Washington announced a record 2004 budget deficit of 413 billion dollars, while the trade deficit in August rose to 54 billion dollars, the second largest ever.
The United States wants to see a "strong dollar", US Treasury Secretary John Snow was quoted as saying in London's Financial Times newspaper on Thursday.
"You know our view on the dollar. We have articulated it many times. We support a strong dollar," said Snow, when asked to comment on the dollar's slide.
The euro was changing hands at 1.2629 dollars from 1.2585 late on Wednesday in New York, 135.95 yen (136.22), 0.6905 pounds (0.6927) and 1.5366 Swiss francs (1.5371).
The dollar stood at 107.67 yen (108.20) and 1.2167 Swiss francs (1.2217).
The pound was at 1.8286 dollars (1.8161), 196.87 yen (196.55) and 2.2250 Swiss francs (2.2186).
On the London Bullion Market, the price of an ounce of gold stood at 425.40 dollars against 423.60 on Wednesday afternoon.