LONDON, Nov 16: The euro approached its record high against the dollar on Tuesday as markets waited nervously for data on US capital flows, amid concerns about how the United States will fund its huge trade deficit.

The single European currency stood at 1.2980 dollars in early European trading against 1.2945 late on Monday in New York.

The euro rose to as high as 1.2984 dollars at one point, closing in on a record high of 1.3005 dollars reached on Wednesday of last week.

Against the yen, the dollar was quoted at 105.25 compared with 105.26 on Monday.

All eyes were turned towards US Treasury International Capital flow data, due to be released later Tuesday - a key indicator of how the gaping US current account deficit is being funded.

"On the capital flow side the dollar continues to suffer from negative foreign direct investment and equity portfolio flows," said HBOS currency analyst Steven Pearson.

He described the capital flow data as a "source of dollar vulnerability".

Market participants were also cautious ahead of a meeting of EU finance ministers, which was due to end later Tuesday, with dealers on alert for any further comments from European officials about the rise of the euro.

The euro was changing hands at 1.2980 dollars from 1.2945 late on Monday in New York, 136.63 yen (136.31), 0.7005 pounds (0.7008) and 1.5233 Swiss francs (1.5260).

The dollar stood at 105.25 yen (105.26) and 1.1737 Swiss francs (1.1792).

The pound was at 1.8523 dollars (1.8466), 195.06 yen (194.34) and 2.1753 Swiss francs (2.1775).-AFP