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LONDON (UK): The euro and pound set another series of multi-year highs in late European trade as the hapless dollar continued to be mired in a sentiment-driven downtrend, analysts said.

The single European currency stood at 1.2388 dollars, after reaching a new record high of 1.2392 dollars earlier in the day. It stood at 1.2329 dollars in New York late Tuesday.

The pound pierced through the 1.76-dollar level for another 11-year high of 1.7624 dollars, up from 1.7552 dollars Tuesday. And the dollar was worth 107.39 yen against 107.45 on Tuesday. "It is a continuation of the bearish dollar sentiment," said Kamal Sharma, strategist at Dresdner Bank.

While there was no fresh data or significant news to warrant a further collapse in the dollar, there is no doubting that the weak dollar sentiment has become ingrained, he said.

This looked the case especially as Tuesday's US data came in strong. Even the problematic US current account deficit shrank in the third quarter. The dollar was expected to fall further, said Sharma.

Analysts also noted that the market appears to be descending into the year-end period of thin volumes. Against this backdrop, large individual trades can have an outsized impact on prices, producing price movements that may be exaggerated.

The pound had its own piece of good news to back its gains versus the dollar. The British labour market tightened further in November while the Bank of England's latest rate-setting deliberations came in a little more hawkish than the market had expected.

The number of unemployment claims fell in November by a seasonally adjusted 7,900 to 917,800, a bigger drop than expected. The Bank of England's latest rate-setting deliberations indicated a go-slow approach to hiking borrowing costs, although a tightening bias was very much in place, analysts said.

Analysts agreed that February was the most likely month for the next rate hike -- coinciding with the central bank's next inflation report, which for the first time will target the eurozone-style Harmonised Index of Consumer Prices measure now renamed the Consumer Price Index.

The record of the bank's December policy-setting meeting "points to a central bank in tightening mode but one that intends to raise rates gradually --scared that a small move could drive a big consumer response," said John Butler, economist at HSBC.

The euro was changing hands at 1.2388 dollars from 1.2329 late on Tuesday in New York, 132.98 yen (132.53), 0.7028 pounds (0.7026) and 1.5538 Swiss francs (1.5516). The dollar stood at 107.39 yen (107.45) and 1.2549 Swiss francs (1.2584).

The pound was at 1.7615 dollars (1.7552), 189.21 yen (188.66) and 2.2115 Swiss francs (2.2084). On the London Bullion Market, the price of an ounce of gold stood at 408.25 dollars against 408 dollars on Tuesday afternoon.

Euro hits 1.24 Dollars for the first Time

Pakistan Times USA Special Correspondent Khalida Mazhar reports from Washington that the euro hit 1.24 dollars for the first time ever during trading  in New York on Wednesday as fears over the US economy mounted on currency markets.

At 1900 GMT, the euro was at 1.2406 dollars, up from 1.2329 dollars in late trading on Tuesday. At one stage, the euro was at 1.2419 dollars but fell back. David Gilmore of FX Analystics said the latest surge had been caused by a news report quoting a European Central Bank official as saying that the bank would not intervene on markets until the euro went past 1.35 dollars.

Euro's climb unbroken as Dollar hits new Low

A report from Berlin says that the euro surged to a fresh all-time high against the dollar Wednesday, extending a rally that has seen it rise by 18 percent against the U.S. currency this year.

The 12-nation currency bought as much as US$1.2396 in Europe after retreating early in the day from its previous high of US$1.2361, reached Tuesday. The euro has hit new highs nearly every day for the last two weeks.

With little economic data to sway markets, the dollar's decline continued against the backdrop of persistent concerns about the U.S. budget and trade deficits, which economists say can undermine a country's currency in the long term.