Euro teeters

The euro briefly rallied to stand above parity with the US $ before returning to the record low level at which it began the trading day.

The euro briefly rallied to stand above parity with the US $ before returning to the record low level at which it began the trading day.

By the end of the morning in London, it was quoted at $O.9968 before rising to $0.9985, just $0.0004 below its start rate.

The euro, launched by 11 European Union countries at the start of the year, fell below $1 for the first time on Thursday.

The euro reached parity at 2047 GMT and then slipped to $0.9997 in late trading in New York. In trading in Japan Friday, it briefly dipped to $0.9990.

By breaching the psychologically important barrier, the euro heightened concern about its long-term viability.

The euro sagged Thursday after the European Central Bank declined to intervene in the market by purchasing euros, concerned that a move to bolster the currency might also undermine the bank's overall monetary policy.

Speaking after the bank's regular council meeting, European Central Bank President Wim Duisenberg didn't rule out intervention in the longer term, but said the euro "by itself won't trigger a monetary policy decision."

Euro-dollar parity was hardly discussed at the meeting, during which the bank also held its key interest rates steady and maintained its target for money in circulation, Duisenberg said.

Rob Hayward, an analyst at Bank of America in London, said the euro is likely to gain strength in the near term as the U.S. economy cooled. "Over the next few months we expect to see the euro recover to a level of around 1.08," he said.