LONDON (AFP) - The euro weakened slightly against the dollar after soaring to a record earlier in the day as traders positioned themselves ahead of a weekend meeting of Group of 20 finance ministers and central bankers in Berlin.
The single European currency in late day trade was at 1.2981 dollars, down from 1.3031 late Wednesday in New York. The euro at one point shot up to a record 1.3074 dollars.
Against the yen the greenback was trading at 104.30 against 104.05 on Wednesday.
While the G20 meeting was not expected to deal directly with currencies, analysts predicted the issue would be raised on the sidelines, especially at news conferences.
"Some mild profit taking ahead of US economic data and tomorrow's meeting of the G20 lifted the beleaguered greenback from its fresh lows," said Alex Beuzelin, senior market analyst at Ruesch International in Washington.
But most analysts believe the dollar will be on the backfoot again as the fundamental concern over the US budget and current account deficits remains.
"We've had a few pullbacks in recent weeks but none of them has gone too far and I doubt this one will either," said Steve Barrow, currency strategist at Bear Stearns.
The euro's surge was partly curtailed last week as eurozone officials increasingly voiced fears that further appreciation could bring anaemic growth on the continent to a standstill.
The most prominent concerns have been raised by European Central Bank president Jean-Claude Trichet, who described the "brutal" currency movements as "not welcome."
The ECB's last foray onto foreign exchange markets was in late 2000. At the time it acted in coordination with other Group of Seven countries to buy euros and sell dollars after the European currency plunged to a record low of 0.8230 to the dollar.
This time, US monetary authorities are unlikely to get involved and are widely believed to be in favor of a managed depreciation in the dollar.
Though US officials have been notably silent about the dollar developments, alarm bells appear to have been rung at the Bank of Japan, which has a reputation for intervening in the market to stem the yen's appreciation.
Despite the threat of intervention, most market analysts say sentiment towards the dollar is near an all-time low.
Elsewhere, the pound remained under pressure after a raft of British data cemented expectations that interest rates may not rise again in this economic cycle.
The euro was changing hands at 1.2981 dollars from 1.3031 late on Wednesday in New York, 135.39 yen (135.59), 0.7014 pounds (0.7005) and 1.5179 Swiss francs (1.5153).
The dollar stood at 104.30 yen (104.05) and 1.1695 Swiss francs (1.1628).
The pound was at 1.8514 dollars (1.8594), 193.07 yen (193.55) and 2.1646 Swiss francs (2.1624).
On the London Bullion Market, the price of an ounce of gold stood at 442 dollars against 443.45 late on Wednesday.
11/18/2004 - 18:33 GMT - AFP