The dollar hit a 2-½ year low against the yen and a record low versus the Swiss franc on Wednesday.
The dollar is hurt by fears of a US recession and speculation about an early Federal Reserve interest rate cut.
US data on Tuesday showing that retail sales last year were at their lowest since 2002 further fuelled market rumours that the US central bank was holding an emergency meeting to cut rates immediately.
But a Fed spokeswoman declined to comment on the rumours.
Views on the US economy were also dented after Citigroup Inc, the largest US bank by assets, reported its first quarterly loss since its establishment in 1998.
"It's hard for anyone to buy the dollar at the moment as people are very pessimistic about the US economy, haunted by the possibility of a recession there," said a trader at a Japanese trust bank.
The US unit struck a fresh 2-½ year trough and was trading around 106.23 yen on electronic trading platform EBS, down 0.4 percent on the day and the lowest since May 2005.
The euro was up 0.3 percent to $1.4845 but off a seven-week peak of $1.4923 hit the previous day and a record high of $1.4969 struck in November.
The dollar hit a record low against the Swiss franc below 1.0855 on EBS. Against the yen, the euro slid to 157.40 yen as investors shunned risky carry trades, in which a low-yielding currency such as the yen is used to finance purchases of assets offering higher yields elsewhere.
The Australian dollar recovered a day after plunging versus the dollar and the yen. Traders said dealers booked profits on the Aussie's sharp fall, while Japanese investors hunted for bargains.
The Aussie climbed 0.4 percent to $0.8858 but was still well below a two-month high of $0.9020 struck on Tuesday.
Against the yen, the Australian dollar slipped to a seven-week low of 93.66 yen before rising to 94.20 yen up 0.2 percent on the day.
Fed chairman Ben Bernanke's comments last week that the central bank was willing to take "substantive additional action" to maintain growth cemented expectations for a half percentage point cut in the Fed's benchmark interest rate, currently 4.25 percent, at its scheduled meeting on Jan. 29-30.
US interest rate futures markets were reflecting a 50-50 chance of the Fed lowering interest rates by three-quarters of a percentage point by the end of this month. The US central bank usually cuts the fed funds rate by a quarter-point or a more aggressive half-point. - Reuters
Source: Trade Arabia
