LONDON, Sept 28: The euro went on another record-setting run against the beleaguered US dollar on Friday, smashing through the $1.42-level for the first time to hit a new peak of $1.4243 in late trade here.

Analysts said the latest spurt in the single European currency, created in 1999, reflected a growing conviction that the US Federal Reserve would continue cutting interest rates to help shore up a struggling US economy.

The euro was trading at $1.4150 late Thursday in New York.

“The market remains decidedly negative on the dollar ...with the euro/dollar reaching a seventh consecutive daily record high,” said Michael Woolfolk at the Bank of New York Mellon.

The US currency has been under heavy selling pressure since last week’s decision by the Fed cut benchmark US interest rates by half a percentage point.

The Commerce Department earlier on Friday reported that its key inflation gauge, the personal consumption expenditures price index, had fallen 0.1pc in August and showed a 1.8pc rise over the past 12 months, its weakest showing in three and a half years.

Core inflation, which excludes volatile food and energy costs, rose 0.1pc in August and came to only 1.8pc in the past year.

“The weaker core figure means the Fed has more scope to ease rates further,” said Orlando Green at Calyon. Lower interest rates reduce the attractiveness of the dollar to investors.

By contrast, the European Central Bank, the guardian of the euro, looks set to continue its monetary tightening bias and is not expected to cut interest rates any time soon.—AFP