NEW YORK, Dec 26: The dollar edged lower on Friday in holiday-thinned trading as market sentiment remained bearish amid concerns that Al Qaeda may try to launch attacks against the United States.

A lack of momentum in thin post-Christmas trade and wariness of intervention by Japanese authorities prevented the dollar from plunging to new lows against the euro and retesting three-year lows set against the yen earlier this month.

“We still have concerns over acts of terrorism after the cancellation of Air France flights to the United States. That of course remains at the fore,” said Andrew Delano, currency strategist at IDEAglobal in New York.

On Wednesday, Air France cancelled Christmas flights from Paris to Los Angeles after US intelligence found the name of at least one person suspected of having links to extremist groups on the passenger list. US officials relayed “credible, reliable” intelligence reports to France regarding plans for “near-term simultaneous attacks that would rival Sept 11,” a US official said.

But Air France said on Friday it will resume its Paris-Los Angeles flights after French intelligence found nothing to substantiate US suspicions about the one passenger having links to terror groups.

In early New York trading, the euro hovered near record highs of $1.2470 against the dollar, trading at $1.2457, and still within sight of the psychologically important $1.2500 mark.

Against the yen, the dollar was down 0.2 per ent to 107.00 yen while traders became wary about possible Japanese intervention to weaken the yen, given the market’s low liquidity in post-Christmas trading.—Reuters