The dollar sank to a record low against the euro and fell to its lowest level since March 2000 versus the yen on Thursday as traders played down the chances of joint market intervention by European and Japanese authorities. Japan's top currency policy official, Hiroshi Watanabe, said on Wednesday that "conditions are in place" for Japan and Europe to act jointly to support the dollar and that other countries hurt by the falling currency could join in for any intervention.
But many market players said such action was unlikely and continued selling the dollar.
"The ECB (European Central Bank) is...seen as critical of intervention by Asian central banks," said Tohru Sasaki, chief forex strategist at J.P. Morgan Chase.
"So it's hard to think that the ECB will jointly act with Japan, which has intervened the heaviest.
The euro bought around $1.3365, up from $1.3345 in late New York trade and just off the fresh record high of $1.3375 hit earlier in the day.
The dollar was at 102.20 yen after falling to 102.11, a fresh 4 1/2 year low and down nearly half a percent from late trading in NY.
The US currency was at $1.9350 per pound, near a 12-year low and close to levels traded just before Britain was ejected from Europe's Exchange Rate Mechanism in 1992.
Earlier this week Trichet indicated that the ECB would keep its policy stance of vigilance against inflation, comments traders viewed as suggesting the central bank is willing to tolerate some euro strength.
A stronger euro lessens the inflationary impact of higher energy costs.
Traders have repeatedly driven the dollar lower despite verbal threats, waiting for evidence the currency's near nine percent drop against the euro and the yen in two months has gone too far too fast for Japanese and European officials.
"Traders are not going to believe it until they see it. They're going to keep blowing up the dollar until actual intervention happens," said one trader at a European bank.
The market also took little notice of comments from a senior US Treasury official that Washington was committed in cutting its budget deficit to help the dollar.
Asked, after a meeting with officials at Bank Indonesia, about US policy regarding the weakening dollar, Assistant Secretary for International Affairs Randal Quarles told reporters: "I explained the commitment to reduce the fiscal deficit as well as to increase US domestic savings."