NEW YORK, April 14: The euro surged to a two-year high against the dollar on Friday as the greenback was buffeted by worries about weakening growth and a persistently high trade deficit as global finance leaders met in Washington.

The single currency stood at $1.3532 at 2100 GMT, compared with $1.3480 in New York late on Thursday, hitting its highest point since January 2005.

The euro approached its all-time high of 1.3666 hit on December 30, 2004 and also set an all-time record at 161.42 yen.

The euro later dipped to 161.32 yen from 160.62 a day earlier.

The dollar meanwhile edged up to 119.22 yen compared with 119.14 late on Thursday.

The market action came just as the Group of Seven finance ministers and central bank governors prepared to conclude deliberations on the health of the global economy.

Analysts said that questions about global imbalances suggest the leaders are content to see a weaker dollar as a means to alleviate these worries.

The US dollar remains in the realm of the trader hell with torture being applied from a potential trade war, potential economic slowdown, and potential G7 action on carry trades, said Andrew Busch at BMO Capital Markets.

There are major arguments made among the economic elite over whether the US dollar should have a continuous devaluation to help the country erase its enormous trade/current account deficit. A weaker greenback would improve the competitive footing of US exporters and make US imports more expensive. The dollar got little relief from a better-than-expected report on the US trade deficit.

The deficit fell slightly to 58.4 billion dollars in February from 58.9 billion in January, the Commerce Department reported. The figure was a bit better than the average analyst estimate of a deficit of 60.5 billion dollars.

Robert Brusca of FAO Economics said that despite the improvement in the deficit, US exports failed to pick up. The narrowing came from a drop in both imports and exports.

Despite all the upbeat forecasts on Europe and the IMF's (International Monetary Fund's) recent missive on growth, US exports -- a real world litmus test -- tell us that activity is waning in the markets into which the US sells its goods. The dollar has also been depressed since European Central Bank chief Jean-Claude signalled that it was ready to raise eurozone borrowing costs again in June.—AFP