The euro slumped below 0.87 dollars today for the first time for six months amid increasing signs of recovery in the US economy.
The single European currency fell to 0.8687 dollars from 0.8777 late yesterday in New York. The last time the euro was so low was in July 2001.
The fall came after US Federal Reserve chairman Mr Alan Greenspan gave a relatively optimistic outlook for the US economy.
Barclays Capital economist Ms Jane Foley said the decline of the euro was a response to Mr Greenspan's speech and the likelihood the European Central Bank would resist cutting interest rates next month.
"The US economy is the best of the bunch when it comes to the G3 because it's still going to perform significantly better this year than the euro zone and certainly much better than Japan," she said.
"So from that point of view you can still draw a dollar-bullish theme, even though there are still a lot of reasons to be cautious about the US".
AFP