The 13-nation euro hit a new all-time high Friday against the U.S. dollar, breaking through the previous record, set a day earlier, as the U.S. currency remained under pressure.
In morning European trading, the euro bought $1.4319 -- surpassing the mark of $1.4310 set Thursday -- before settling back slightly to $1.4306.
The euro bought $1.4293 in late New York trading on Thursday. The British pound climbed to $2.0472 on Friday from $2.0448 in New York the day before, while the dollar slipped to purchase 114.88 Japanese yen from 115.65 on Thursday.
The further dip in the dollar followed another weak economic report from Washington.
Currency will be a hotly debated topic at an annual G-7 meeting of central bank heads and finance ministers to be held in Washington Friday, according to Michael Woolfolk, senior currency strategist at the Bank of New York.
"The fact that the euro has risen suggests that the negative dollar sentiment is strong and persistent, due to recent deterioration in interest rate differentials and growth differentials," Woolfolk said.
European officials are worried that the euro's rise against the dollar will hurt exports to the U.S. and China. The European Central Bank is expected to raise interest rates by January, while in the United States, the Federal Reserve will likely reduce interest rates at the end of the month, Woolfolk said.
The U.S. Labor Department reported Thursday that applications for jobless benefits hit 337,000 last week -- up 28,000 from the week before and the biggest one-week surge since claims jumped 42,000 in the week of Feb. 10.
The jobless rate increase in the U.S. was more than four times the gain of 6,000 that economists had been expecting. The development was taken as a possible sign that the labor market is starting to weaken under the weight of a severe housing downturn and tight credit markets.
Earlier this week, both U.S. Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke warned that the housing crisis was likely to last longer than had been expected.
Already on Wednesday, the U.S. Commerce Department said the construction of new homes and apartments plunged to a 14-year low in September, while the National Association of Home Builders' survey of builder confidence fell in early October to the lowest level seen in the 22-year history of the survey. ( CNN )