The euro fell again against the dollar yesterday, setting a record low for the second consecutive trading session.
The slide which took the euro to a low of $0.8229 left the currency 30 per cent below its level at inception in January 1999.
Analysts said fears of intervention before the US presidential elections had all but disappeared, leaving little to prop the currency up.
"With few now concerned over intervention we have started to see some speculative selling of the currency," said Mr Robert Lynch, currency strategist in New York.
But others said the underlying problem for the euro continued to be the outflow of longer-term investment funds.
The euro's latest falls came as Mr Wim Duisenberg, president of the European Central Bank (ECB), stressed that the mediumterm outlook for the euro-zone economy was nothing other than positive.
Addressing the German chapter of the International Chamber of Commerce at its annual meeting in Berlin, the ECB president called on governments to maintain the tight controls on public spending which had already helped to create greater economic stability in the euro zone.
While praising steps taken towards tax reform and broader liberalisation, notably of labour markets, he also called for further deregulation to eliminate "structural rigidities".
And, in about the only direct reference to the current economic developments, Mr Duisenberg warned strongly against inflationary wage rises stoked by the recent sharp increase in energy costs.
He said the ECB's careful policy of gradually increasing interest rates had kept inflation under control, while allowing the eurozone's economies to expand. Growth would reach 2.5 per cent this year, and 3 per cent in 2001 and 2002, he predicted.
Although there was a possibility the surge in oil prices might clip growth rates in the closing months of this year, Mr Duisenberg stressed such effects would be only temporary.
And while inflation this year had risen, in 2001 and compared with the US it would remain "relatively low", he argued.
"Europe can rely on a central bank which is fully committed to price stability," Mr Duisenberg concluded.
