LONDON (AFP) - The euro steadied just below the 1.30 dollar mark as the markets positioned themselves for this weekend's G20 meeting of finance ministers and central bankers in Berlin.
The single European currency stood Friday at 1.2995 dollars in early European trading, against 1.2961 late on Thursday in New York.
The dollar 103.77 yen against 104.20 late on Thursday.
Though analysts doubted anything substantive on the dollar's slide would emerge from the Group of 20 meeting, there were concerns that relations between US and European officials would be decidedly frosty.
"The build-up to the meeting of the G20 over the coming weekend is laying the foundations for what could prove to be a truly disharmonious affair," said Neil Mellor, analyst at the Bank of New York.
Ministers have said that foreign exchange will be prominent in this weekend's discussions, even though it does not normally play a major role at meetings of the G20, which brings together the Group of Seven countries and other economies such as China, India and Brazil.
The meeting comes in the wake of the dollar hitting a new all-time low against the euro of 1.3074 dollars on Thursday.
Analysts said the dollar will face further selling pressure if action is not taken to improve the fundamentals driving the dollar's descent, specifically on the United States' current account and budget deficits.
Michael Klawitter, currency strategist at WestLB, said it will be difficult to reverse the "fundamentally driven trend" in the dollar unless there are meaningful signs that the US administration really plans to reduce its fiscal deficit.
The euro's surge was partly curtailed last week as eurozone officials increasingly voiced their concerns 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".
There has also been talk about possible central bank intervention to stem the dollar's decline, though analysts say this appears unlikely.
The ECB's last foray onto foreign exchange markets was in late 2000.
At the time it acted in coordination with other G7 countries to buy euros and sell dollars after the European currency plunged to a record low of 0.8230 usd.
This time, the US monetary authorities are unlikely to get involved and are widely believed to be in favour of a managed depreciation in the dollar.
"The US Federal Reserve is, currently, unlikely to support the ECB should it request concerted intervention," said HBOS currency strategist Steve Pearson.
Fed chairman Alan Greenspan was to join Trichet later Friday in Frankfurt on a panel discussion called "The euro in wider circles".
However, the Fed and Greenspan have a policy of not commenting on dollar developments.
"In the absence of US data we look for the downward dollar trend to continue, albeit at a slower pace today as euro rallies may be used for further profit taking," said HBOS' Pearson.
The euro was changing hands at 1.2995 dollars from 1.2961 late on Thursday in New York, 134.85 yen (135.05), 0.7005 pounds (0.7004) and 1.5151 Swiss francs (1.5171).
The dollar stood at 103.77 yen (104.20) and 1.1660 Swiss francs (1.1705).
The pound was at 1.8557 dollars (1.8496), 192.58 yen (192.70) and 2.1639 Swiss francs (2.1653).
On the London Bullion Market, the price of an ounce of gold stood at 443 dollars against 442 late on Thursday.
11/19/2004 - 12:14 GMT - AFP