The dollar stumbled to the latest in a series of record lows against the euro today as a heightened security alert in the United States gave the greenback another knock in a thin, pre-Christmas market.
The US government raised its terror alert yesterday to "orange", the second-highest level, saying there was a high risk in the holiday period of an attack that could be even bigger than the events of September 11th, 2001.
"The market is very blinkered and people are reluctant to hold dollars given the raised state of alert," said Mr Mark Henry, currency strategist at GNI.
In a thin European session, the slid over half a per cent to $1.2447, hitting its 14th record low against the euro in 17 trading sessions.
The US currency also came within a whisker of last week's seven-year low against the Swiss franc.
"Momentum and positioning indicators are looking stretched but this is not yet sufficient to turn the trend," said Mr Steven Pearson, chief currency strategist at Halifax Bank of Scotland.
"European corporates are keen to hedge dollar weakness going into next year."
Dealers said $1.2450, the equivalent of the 1987 low in dollar/mark, would act as the next chart barrier for the euro, with further stiff resistance expected at the psychological $1.25 level.