Dollar index hits record low

The dollar fell to a record low against a basket of major currencies and held near a record trough against the euro on Thursday as weak US service sector and employment data kept alive fears of a US recession.
The Institute for Supply Management's non-manufacturing index for February beat expectations on Wednesday, but still showed the service sector shrank for a second straight month.
In addition, ADP Employer Services said on Wednesday that the private sector cut 23,000 jobs in February, stirring worries that US jobs data due on Friday could come in weak. The lacklustre data kept alive market expectations that the Federal Reserve could cut interest rates by as much as 75 basis points to 2.25 percent by or at its March 18 policy meeting, keeping the dollar under pressure.
By contrast, the European Central Bank is expected to keep interest rates unchanged at 4.0 percent at a meeting later on Thursday, and for a few months after that.
Given the divergence in monetary policy outlooks, the euro could rise above $1.55 within the next month despite increasing complaints among euro zone policymakers about the dollar's weakness, Fujii said.
The euro was up 0.15 percent from late US trading at $1.5293 inching closer to a record high of $1.5305 struck on electronic trading platform EBS on Wednesday. The dollar struck an all-time low against a trade-weighted basket of major currencies, with the dollar index falling as low as 73.365.
On Wednesday, the dollar's fall to record lows helped lift gold to an all-time peak of $991.80 an ounce and US crude oil futures to a record high of $104.95 a barrel The dollar and higher-yielding currencies dipped against the yen, dragged down by profit-taking as well as selling by overseas funds and Japanese exporters, traders said.
The dollar fell 0.2 percent to 103.81 yen but held above a three-year low of 102.60 yen hit on EBS on Monday. The yen rose even though Tokyo share prices rose around 2 percent and other Asian stock markets rallied. Moves in share prices are regarded as a barometer of investors' risk appetite, and a rise in equities can fuel demand for carry trades, which involve selling low-yielding currencies such as the yen to invest in higher-yielding currencies.
The New Zealand dollar gained after the Reserve Bank of New Zealand kept interest rates steady at 8.25 percent as expected, but said inflationary pressures remained persistent. The high-yielding currency stood at $0.8015 up from around $0.7975 just before the rate decision. Sterling was little changed at $1.9920 ahead of a rate decision by the Bank of England later on Thursday.