The dollar hovered near record lows today as unexpectedly weak data showed orders for long lasting US-made goods fell the most in five months, cementing expectations for further US interest rate cuts.
The euro/dollar was changing hands up 0.4 per cent in early New York trade at $1.5036. The euro had climbed as high as $1.5087 according to Reuters data, the first time it has been above $1.50 in its nine-year history. Dollar/yen was down 0.9 per cent at 106.37.
The dollar slid to an all-time low versus a basket of currencies earlier in the global session as investors grew more convinced the Federal Reserve will cut rates yet again.
US durable good orders fell 5.3 per cent in January, compared with the 4 per cent forecast from economists polled by Reuters.
The report added to fears of a US economic slowdown at a time when rising oil prices are pushing prices higher, leaving the Fed - the US central bank - with the dilemma of whether growth or inflation is potentially the bigger problem.
"This is another piece of data that justifies concerns about stagflation," said Adam Fazio, senior currency strategist at CIBC World Markets in New York. "This also adds to the case that we're going to see a 50-basis-point easing in March."
The Fed next meets on monetary policy on March 18th. There are 100 basis points in a percentage point.
The dollar recovered a little after the durable goods data as investor focus shifted to Fed chairman Ben Bernanke who is seen leaving the door open for further rate cuts in his semi-annual monetary policy report before the US House Financial Services Committee from 3pm (Irish time).
The Swiss franc also rose to a record peak against the US currency, while the New Zealand dollar touched levels not seen since it was floated in 1985.
Fed Vice Chairman Donald Kohn said last night a weakened US economy was a bigger worry than higher inflation, suggesting a willingness for more rate cuts.