The dollar plunged across the board today, after a report showed the US trade deficit widened way beyond expectations to a new record in November.
The trade gap ballooned to $60.3 billion in November, defying Wall Street expectations that it would narrow to $54 billion. October's deficit was revised to a wider $56 billion.
If Americans continue to buy foreign goods faster than US businesses can sell their goods and services overseas, the outflow of dollars will remain heavy, putting persistent pressure on the currency.
The euro soared over a cent to session highs around $1.3236 from around $1.3123 shortly prior to the report and up almost 1 per cent from levels late the prior session in New York.
Against the yen the dollar tumbled to 102.34 yen, from around 103.16 yen shortly prior to the report and down almost 1 per cent from late New York yesterday.
While the trade deficit has been a key factor in the currency's long running descent, recently rising US interest rates and stronger US economic data than in Europe have started to lend the greenback a little support.
US Treasury Secretary Mr John Snow said he he wants to "do things" to sustain the dollar and work with the Congress cut the budget deficit down.
The ECB's Mr Otmar Issing said Europe has shouldered too much of the burden of recent foreign exchange adjustments and Asia must do its share, suggesting Asian currencies were better able to strengthen against the dollar.