NEW YORK (AFP) - The euro stabilized slightly below the 1.29 dollar threshold as euro zone officials voiced concern over the European currency's sharp rise.
The currency markets were awaiting a Wednesday meeting of the US Federal Reserve expected to raise the US prime rate by a quarter of a percentage point.
At around 22:00 GMT, the euro was trading at 1.2897 dollar against 1.2895 three hours earlier and 1.2916 at around 22:00 GMT Monday.
The dollar was changing hands at 105.65 yen against 105.50 Monday night in New York.
The euro had dropped back to 1.2887 dollar at around 11:40 GMT after a previous day record of 1.2987.
HBOS economist Steven Pearson said the dollar stabilized over the previous 24 hours as traders digested comments by European officials on the euro's recent rise.
Thomas Benfer of the Bank of Montreal said comments by European Central Bank (ECB) president Jean-Claude Trichet were stabilizing the euro, and "without these comments from yesterday we would have been even higher."
While last week he made only passing reference to "excessive volatility" and "disordered movements" on the exchange markets, the ECB chief on Monday directly targeted the recent rise of the euro.
The central bank presidents of Belgium and France followed with similar comments.
On Wednesday, US balance of payments figures for September were to be released and, said Benfer, "If the numbers show a large deficit again," that "will give the market more fuel to the fire and push the euro up again."
Investors were also awaiting a Wednesday meeting of the Federal Reserve's monetary policy committee, which was expected to raised the US prime interest rate from its current 1.75 percent rate by a quarter of a percentage point.
The British pound was trading at 1.8576 dollar against 1.8560, and the dollar was quoted at 2.1976 Swiss francs against 2.1921.
11/09/2004 - 23:23 GMT - AFP