LONDON, Oct 18: The euro hit historic highs above $1.43 on Thursday as the market judged that the United States will be forced to cut rates again to help a slowing economy, dealers said.

They said a meeting on Friday of Group of Seven finance ministers and central bankers in Washington is not expected to reverse the dollar’s sustained weakness despite rising concern about the currency outlook.

In late trade on Thursday, the euro was at 1.4291 to the dollar, up from Wednesday’s 1.4207 and having hit 1.4310 mid-afternoons to beat the previous record of $1.4283 set on October 1.

The dollar also fell sharply to 115.63 yen from 116.57 late on Wednesday.

Reflecting growing anxiety about the gains in the euro, which are being driven by speculation the US Federal Reserve will cut interest rates again, business leaders on both sides of the Atlantic expressed alarm.

The head of the European employers association Business Europe, Ernest-Antoine Seilliere, called on Thursday for “political intervention” in reaction to the euro’s spike higher.

“We are asking for political intervention at the level of the world leaders on the behalf of the euro,” he said, adding that the currency’s level had reached the pain “threshold.”

Meanwhile, US industrial leaders said they feared wider problems from the prolonged weakness in the dollar even if it boosts US exports.

The Manufacturers Alliance/MAPI said in its quarterly outlook that the soft dollar is among several risks that present a “daunting challenge” to the global economy.

The group said the dollar “is in the midst of an extended period of decline ... Global sentiment against the dollar is gaining traction, generating challenges for the short-term economic outlooks of major US trading partners.”Analysts said that while currency issues may figure largely at the G7 meeting, little concrete can be expected to result and the dollar will be left once more to its own devices.

“The fall in the dollar perfectly

reflects economic fundamentals,” said Julian Jessop of Capital Economics.

“The United States will do no more than repeat that it is the markets that determine exchange rates and it will oppose any sort of intervention,” said Mitul Kotecha, an economist with Calyon.

“There is every chance that the aftermath of the G7 meeting will see the dollar resume its weakness,” Kotecha added.

The dollar’s woes were made worse by weak US housing market data on Wednesday, which underscored the problems being caused by defaults in the sub-prime home loan segment.

The G7 meeting will include finance ministers and central bank chiefs from the seven leading industrialized nations -— the United States, Japan, Germany, France, Britain, Italy and Canada.

In late European trade on Thursday, the euro was quoted at 165.79 yen compared with the previous day’s 165.73, at 0.6968 pounds after 0.6970 and at 1.6792 Swiss francs after 1.6761.The dollar stood at 1.1697 Swiss francs, down from 1.1825.

The pound rose to $2.0463 from 2.0394.

In London, the price of gold was firmer at $764.15 per ounce, up from Wednesday’s $762.50.—AFP