NEW YORK - THE euro leapt against the dollar on Thursday, lifted by European Central Bank signals that dimmed prospects for more interest rate cuts, and soared to a new record high against the pound.

The euro was at 1.3350 dollars at 2200 GMT (6am Singapore time), up from 1.3020 dollars late on Wednesday in New York.

The dollar also lost ground to the yen, trading at 91.47 yen after 92.71 on Wednesday.

The single European currency, which traded below 1.30 dollars in the beginning of the week, shot earlier on Thursday to 1.3406, a high last seen a month and a half ago.

'We've broken some very important technical levels,' said David Gilmore, analyst at Foreign Exchange Analytics.

According to Mr Gilmore, the foreign exchange market reacted to 'fairly hawkish comments from ECB officials on future rate cuts that reduced hopes of additional easing'.

The ECB's chief economist Juergen Stark late on Wednesday downplayed the likelihood of an interest rate cut in January, saying that after three consecutive reductions, 'the remaining room for maneuver is very limited'.

In contrast, the deepening recession in the United States has raised expectations the Federal Reserve will cut its key rate, already at a historic low of 1.0 per cent, at a two-day meeting that opens Monday.

'The market is in a bit of a consolidation mode and dollar-rally sustainability is being questioned,' said Ms Jessica Hoversen, an analyst at MF Global.

'The market seems interested in risk taking,' she added, explaining the disinterest in the greenback, often viewed by investors as a safe haven.

Weighing on the dollar was uncertainty over the fate of a 14-billion-dollar bailout bill (S$20.5 billion) for the US auto industry. The legislation passed the House of Representatives and has White House backing, but is facing stiff opposition in the Senate.

'The ongoing discussion about the US bailout package for car makers puts pressure on the dollar,' Commerzbank analysts commented.

The pound continued its slide against the euro, falling to 1.1224 euros on news that British business confidence was at a 28-year low in December.

In late New York trade, the pound jumped to 1.5010 dollars from 1.4786 late on Wednesday.

The dollar fell to 1.1842 Swiss francs from 1.1983. -- AP