The dollar tumbled to a record low against the euro on Thursday and reached parity with the Canadian currency for the first time in 31 years on expectations of more cuts in US interest rates after this week's sharp reduction.
The sell-off started in Europe and continued later in the day in New York as investors and analysts concluded lower benchmark rates in the world's largest economy will hurt the return on dollar-denominated assets, diminishing the greenback's appeal.
Against the euro, the dollar breached the key $1.40 level and almost touched $1.41 at around noon in New York. The eurozone single currency also rose above 70 pence against sterling for the first time in one and a half years. Also on Tuesday, the Canadian dollar briefly reached parity with the US dollar for the first time since 1976, supported by lofty commodity prices, a strong domestic economy and concerns about the US economic slowdown.
In mid-afternoon trading in New York, the euro had risen to a record high of $1.4099, before surrendering some gains to trade up 0.8 percent on the day at $1.4074. The dollar was down 1.2 percent against the yen to trade at 114.56 per dollar, on track for its biggest one-day percentage decline in two weeks.
The dollar set a 15-year low against a basket of six major currencies, at 78.45, in its biggest one-day drop in more than a year. A move below 78.190 would take the dollar index to record lows. The dollar touched a two-and-a-half-year low against the Swiss franc. Dollar/Swiss franc was last at 1.1715, after going as low as 1.1688, its lowest level since March 2005.
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