LONDON, Jan 5 - The dollar stumbled to a new record low against the euro and hit seven-year lows versus the Swiss franc in European trade on Monday as heavy selling continued in the early days on the new year. During the Asian session, dollar weakness was seen prompting the Japanese authorities to intervene in currency markets to buy the greenback and sell the yen in a bid to protect domestic export competitiveness. There was no official confirmation of intervention and the dollar was unable to hold on to gains. Weekend comments from U.S. Federal Reserve Governor Ben Bernanke were used as a fresh excuse to sell the dollar after he said that the U.S. central bank was right to hold interest rates at 45-year lows given the rate of inflation. Relatively low U.S. interest rates as well as the country's troubles in narrowing its current account deficit have been major drivers of dollar weakness throughout last year and are widely expected to weigh on the currency in early 2004.
By 0800 GMT the dollar fell as low as $1.2695 per euro. It also hit its lowest versus the Swiss franc since September 1996 at 1.2285 at the start of European trading. The dollar was also holding near recent three-year lows against the yen after a brief fall to a four-week low of 106.76 yen triggered dollar purchases which traders had attributed to the Bank of Japan. No major U.S. data was scheduled for release on Monday with only November construction spending due at 1500 GMT. From the euro zone, a flash estimate of December consumer inflation was due at 1100 GMT. For full report on major currencies click on [FRX/] For previous updates on currency moves click on [USD/-M]//