The dollar jumped to a two-year high against the euro and hovered near a two-year peak versus the yen on Tuesday, buoyed by a widening yield advantage as the US currency's rally showed few signs of cooling.
With little major economic data due later in the day, traders and speculators successfully triggered automatic orders to buy the dollar and drove it to an 18-month high against the Swiss franc and a three-month high versus the British pound.
Some analysts said the dollar could draw more strength from foreign buying at this week's auctions of US Treasuries totalling $44 billion, as well as US companies repatriating overseas earnings under a reduced tax rate.
"Dollar support is likely to continue in the near-term," said Sharada Selvanathan, currency strategist at BNP Paribas in Singapore.
The reduced tax, part of the Homeland Investment Act, expires at the end of the year, and traders have cited the corporate earnings repatriations as being a consistent source of dollar buying against the euro.
Helping to undermine the euro were ongoing riots in France, while the European Central Bank got a blunt message from euro zone finance ministers at a meeting in Brussels not to raise interest rates.
Jean-Claude Juncker, chair of the meeting, said the ECB "shouldn't make hasty decisions".
The dollar's latest big gains were ignited on Friday after the currency successfully broke through what had been tough resistance around the $1.1870 level against the euro and hit new highs, sparking waves of buying.
But some strategists believe the US currency is ready for a pull back on profit taking after racking up gains of nearly 3 percent against the euro in just a week.
"The dollar could see some correction following its recent rapid rise," said Satoru Ogasawara, forex strategist at Credit Suisse First Boston Securities.
In early Asian trade, the euro tumbled through a series of stop-loss triggers to $1.1710 on electronic trading platform EBS, its weakest since November 2003. By 0555 GMT, the single currency changed hands around $1.1725.
The euro's sharp slide has painted a bleak technical outlook for the currency, with some analysts saying the next major level of support won't come until $1.1580.
The dollar's strength against European currencies pushed it up near 1.3180 Swiss francs the highest since April 2004. Sterling swooned to $1.7347, its weakest since late July.
Against the Japanese currency, the dollar edged up 0.2 percent to 117.85 yen, near Monday's two-year peak at 118.38 yen.
The riots in France and political calls for the ECB to hold off on raising rates are among the latest woes dogging the euro this year.
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