The European Central Bank is concerned about the falling US dollar and "brutal" currency moves are unwelcome, according to bank president Mr Jean-Claude Trichet.

In the ECB's clearest comment on the decline of the dollar, Mr Trichet said yesterday that recent currency moves were not a matter of indifference to the ECB.

The dollar lifted from another record low after Mr Trichet's comments, made after a meeting of G10 central bankers in Basle, Switzerland. However there was no sign of any official discussion of the issue by the central bankers and no hint of a co-ordinated strategy to try to support the ailing dollar.

Early yesterday the euro hit another record high of just below $1.29, but following Mr Trichet's comments it fell back to around $1.28 in later trading. Many analysts continue to believe that the currency has further to fall, however.

In an outlook published yesterday NCB stockbrokers in Dublin predicted that the euro will top $1.35 as the US dollar bear market moves into its final phase. They also warn that there is a danger in the months ahead of a destabilising fall in the US dollar and US financial markets.

However, for the moment investors are convinced that the Bush administration is happy to see the dollar drift lower to boost US economic growth.

In contrast, concern is rising in Europe as the dollar falls ever lower against the euro.

Speaking after the Basle meeting, Mr Trichet said: "There was a mention by Europe that excess volatility and brutal moves were not welcome and not appropriate." He added: "We are concerned. We are not indifferent."

The Bank of Japan Governor Mr Toshihiko Fukui said there was "concern but no panic" among policymakers about the dollar.

But Mr Trichet, chairman of the meeting, said foreign exchange risks were not part of the G10 discussion at the two-monthly health check on world growth, which the central bankers see as improving steadily.

France, a G7 member, is especially vocal in stressing that it hurts growth prospects, with the French Prime Minister, Mr Jean-Pierre Raffarin, yesterday echoing complaints from President Jacques Chirac last week.

"Instability is neither in the interests of the United States nor in the interest of Europe," he said. "We must together, quickly, find the ways to ensure parities that are more compatible with economic reality."

Italy's deputy Industry Ministry later said that if the euro rose much further, his country's exporters would face an emergency.