LONDON, Oct 19: The ailing US dollar hit another record low versus the euro on Friday as the market fretted over gloomy US economic prospects and G7 finance ministers gathered in Washington, dealers said.

In early European trade, the euro jumped to a record $1.4319, the highest level since the single currency’s creation in 1999.

That was an increase of 14 per cent over the past year and 22 per cent up on its initial rate of $1.1665 set on December 31, 1998.

In late European deals, it stood at $1.4250, down from $1.4297 late on Thursday.

The dollar slid to 114.96 yen, from 115.62 late on Thursday.

The dollar’s dwindling value has been thrown into the limelight ahead of the gathering of Group of Seven (G7) finance ministers and central bank chiefs later on Friday in Washington.

US Treasury Secretary Henry Paulson continues to voice confidence in a “strong dollar” but the currency has declined sharply in the past year.

Nervousness about the health of the global economy and the meeting also pushed up the yen, which is often sold by speculators to fund risky “carry trade” investments in high-yielding assets.

Dealers said players were betting that G7 chiefs would refrain from taking any action to try to bolster the sagging dollar despite growing concern in Europe about the strong euro’s effect on eurozone exporters.

“There is already some speculation that officials will attempt to prop up the dollar at the G7 finance ministers’ meeting,” said Julian Jessop of Capital Economics.

“But we expect this meeting to be a non-event for the markets.”

In recent years, G7 officials have refrained from any direct signal to impact currencies.

While French and Italian politicians have voiced concerns about the euro’s rise, Germany and other eurozone countries appear more relaxed about it.

On the sidelines of a European Union summit meeting in Portugal French President Nicolas Sarkozy said he saw a consensus among EU leaders that some currencies were too weak ahead of the Washington G7 meeting.

“Not everybody considers that the euro is too high but everybody considers that other currencies are too weak,” Sarkozy told reporters.

The French president did not specify which currencies he had in mind.

In late European trade Friday, the euro changed hands at $1.4250, against $1.4297 late Thursday, 163.82 yen (165.32), 0.6963 pounds (0.6992) and 1.6709 Swiss francs (1.6721).

The dollar stood at 114.96 yen (115.62) and 1.1726 Swiss francs (1.1693).

The pound was at $2.0470 ($2.0444).—AFP