Lack of support from the world's central banks has continued to weigh on the euro. The currency reached fresh lows of $0.8250 yesterday and could fall further.

There has been no sign of support from Montreal where the world's finance ministers and bankers from the 20 most industrialised nations are meeting. A draft communique did not even mention the euro, saying only that exchange rate regimes must be based on sound financial principles.

Few observers expect intervention. The exception could be a "euro crisis". According to Mr Tony Norfield, global currency strategist at ABN Amro, an accelerated drop in the currency could prompt the central bankers to rethink.

It is unlikely, however, that intervention would work. Data indicate that most selling has been done by long-term fund managers rather than short-term speculative traders more easily squeezed by central bank buying.

If many of these decided to start selling the euro then a more precipitous drop could be expected. According to Mr Derek Keogh of Anglo Irish Bank, there will be further falls in the euro's value in the short term, adding to Irish inflationary pressures. "The effect of any intervention is, at best, likely only to bring the euro back to the levels when the Central Banks last intervened a month ago."

The ECB and the central banks of the US, Japan, the UK and Canada bought euros on September 22nd, starting at about $0.87. The purchases came two days after the euro had fallen to a record of $0.8443 and briefly drove the currency as high as $0.90.

But the threat of further intervention has largely receded in the market, due partly to ECB president Mr Wim Duisenberg.

But it is also likely that the US which is crucial to any credible intervention, does not want to sell the dollar, particularly with the presidential election looming.