Rubin was closely identified during his four years in office with the strong dollar policy that has been maintained by his successor, Lawrence Summers. But, speaking to reporters after a speech to a business conference in Tokyo, he said the euro's weakness was not a reflection of the high-flying dollar but was due to large capital outflows from the 11-nation eurozone.

"I don't think the level of the euro has anything to do with the dollar policy," he said.

"The key for the euro is for Europe to undertake the structural, regulatory, open-market reforms that will make Europe more attractive for investment and attract capital inflows rather than experiencing capital outflows," said Rubin, now chairman of the executive committee of financial services giant Citigroup.

Stressing that over time currencies will follow economic fundamentals and investment flows, Rubin said the relatively strong dollar had gone hand in hand with a high rate of growth in the United States and a very low rate of unemployment. Asked whether the United States would be able to continue attracting capital to plug its widening current account deficit, Rubin said: "I think the United States has many strengths and as long as our policies are sound - and in my judgment that very much includes fiscal discipline and our open trading markets - then I think over time, on average, we can have a good economy.

"But I think we can't afford to be complacent. We need to pay down our federal debt, keep our markets open and improve our public education system."

Rubin declined to comment on intervention by leading industrial nations on September 22 to prop up the euro which has fallen more than 25 per cent against the US currency since its launch on January 1, 1999.