LONDON, Nov 23 (AFP) - The euro rose above 1.31 dollars on Tuesday for the first time as the US currency continued its retreat on concerns about imbalances in the American economy.
The single European currency rose to as high as 1.3102 dollars in late European trading, exceeding a previous record of 1.3092 dollars reached just hours earlier.
The single European currency was trading at 1.3095 dollars in Late London trading against 1.3047 late on Monday in New York.
The dollar was changing hands at 103.42 yen from 103.10 on Monday.
HBOS currency analyst Steve Pearson said that the dollar's decline was part of a now well-established downward trend for the US currency.
"The dollar continues to plumb new depths against a broad range of currencies," he noted.
Pearson has a target for the euro of 1.35 dollars.
"We think it will top out around there ... probably in the first quarter of next year," he said.
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 on Tuesday 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 euros the country holds in its currency reserves weighed on the dollar.
"In the current environment, anything is seen as a good excuse to sell the dollar," said Marios Maratheftis at Standard Chartered.
The news from Russia is hardly new and the idea has been circulating for some time that the country may be speeding up the diversification of its reserves to include more euros. Speculation is that other countries may do so as well.
The euro was changing hands at 1.3095 dollars from 1.3047 late on Monday in New York, 135.41 yen (134.57), 0.6996 pounds (0.7013) and 1.5162 Swiss francs (1.5167).
The dollar stood at 103.42 yen (103.10) and 1.1578 Swiss francs (1.1623).
The pound was at 1.8716 dollars (1.8602), 193.53 yen (191.73) and 2.1667 Swiss francs (2.1619).
On the London Bullion Market, the price of an ounce of gold stood at 448.15 dollars against 447.80 late on Monday.
11/23/2004 17:35 GMT - AFP