(LONDON) - The besieged US dollar, dragged down by weak US job figures, plunged to a record low against the euro here Wednesday, helping push the price of gold to its highest reading ever.

The euro climbed to 1.53 dollars, breaking its previous record of 1.5274 dollars set on Monday, and was later trading at 1.5285 against 1.5210 late Tuesday.

The greenback edged up against the yen, reaching 104.06 after 103.29 on Tuesday.

Gold meanwhile jumped to a record 991.47 dollars an ounce, with the precious metal seen as a safe haven at a time when the US economy, the world's strongest, is wilting.

Demand for gold has also increased in line with the steady weakening of the dollar against other currencies.

Dollar-denominated commodities such as gold and oil tend to gain as a declining greenback makes them cheaper for buyers using other currencies.

The dollar came under heavy selling pressure after the ADP National Employment Report showed that private sector US firms shed 23,000 jobs in February, well below expectations that around 18,000 new positions had been created.

Analysts said the report suggested that official non-farm employment figures for February, to be released Friday, could also reveal a loss of jobs by the US economy.

"Employment appears to have really stopped growing last month, and may now even be shrinking, with initial jobless claims closing in on the 400,000 a week mark," said Paul Ashworth, US economist at Capital Economics.

A contracting job market, indicative of sharply slower US economic momentum, raises chances the US Federal Reserve will cut interest rates further, making the dollar far less attractive to investors than the euro.

The rapidly appreciating euro has been explained by some analysts as reflecting differences in strategy between the Fed, which has been easing monetary policy, and the European Central Bank, which has been holding firm in the midst of rising eurozone inflation.

The ECB is to convene on Thursday when its governors will have to wrestle with the twin threats of inflation and slumping growth, analysts predict.

A poll of 30 economists by Thomson Financial News/AFP found they all expect the ECB to leave its key lending rate unchanged at 4.0 percent, amid inflation that remained stuck at 3.2 percent in February.

The benchmark US Fed Funds rate is currently at 3.0 percent and Federal Reserve Chairman Ben Bernanke has signalled that it could soon be lowered further in order to spur flagging US growth.

Pressure is also growing for an interest rate cut in the eurozone, where economic activity is hampered by record oil prices, the slide in the US economy and financial market volatility.

The European Union's executive commission as well as eurozone lawmakers have all issued warnings on the euro in recent days, fearing that its strength will cut into exports and dampen growth.

But Ashley Davies, currency strategist at UBS, said coordinated action to bring down the value of the euro was unlikely.

"Given the ECB's mandate to ensure price stability and the Fed's willingness to see further improvement in export growth, the risk of unilateral or coordinated intervention to precipitate a euro adjustment against the dollar is low at this stage," Davies said.

In Europe on Wednesday, the euro changed hands at 1.5285 dollars against 1.5210 late on Tuesday, at 158.99 yen (157.14), 0.7664 pounds (0.7657) and 1.5838 Swiss francs (1.5788).

The dollar stood at 104.06 yen (103.29) and 1.0367 Swiss francs (1.0377).

The pound was at 1.9935 dollars (1.9858).

Text and Picture Copyright 2008 AFP. All other Copyright 2008 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.