The dollar edged closer to an all-time low against the euro on Friday as poor US data on durable goods orders and new home sales the previous day reinforced expectations for a Federal Reserve rate cut next week.
The yen slipped as Asian stock markets pushed higher, warming demand for risky trades that involve selling the yen, while a jump in gold and oil prices pushed the Australian dollar to a nearly 24-year peak against the US dollar.
Analysts singled out the Fed's rate meet ending Wednesday as the biggest near-term risk to the market. It is widely expected to trim overnight rates by 25 basis points to 4.5 percent, following a half-point cut last month.
Speculation of an additional cut after that was helping to keep the dollar under selling pressure, said Tomoko Fujii, head of economics and strategy for Japan at Bank of America in Tokyo.
"Everyone is interested in what the Fed will do next week and what it will say in its statement," she said. "Some market participants are starting to expect aggressive moves by the Fed."
The dollar's slide has helped fuel the surge in commodities, driving gold to a 28-year peak above $777 an ounce and US crude to a record high above $91 a barrel Meanwhile, a 1.3 percent climb in Japan's benchmark Nikkei average and a rise in many other Asian bourses prodded selling of the yen.
The euro edged up 0.1 percent to $1.4339 holding just beneath $1.4349 struck on EBS earlier in the week - the highest since the single European currency was launched in 1999. The dollar was little changed at 114.25 yen holding off a six-week low of 113.25 yen hit on Monday. The euro gained 0.25 percent to 163.90 yen.
The Australian dollar climbed to $0.9119 the highest since mid-1984. The Aussie has benefited from expectations that the Reserve Bank of Australia will bump up rates next month to 6.75 percent.
Such a view also helped the high-yielding Aussie to climb around 0.3 percent against the yen, while the New Zealand dollar bumped up roughly 0.5 percent versus the yen.
The yen has been driven by swings in equity markets as a gauge of investor appetite to hold risky positions like carry trades - using the low-yielding Japanese currency as a cheap source of cash to buy higher-yielding currencies and assets. Earlier this week the write-down of $8.4 billion of assets by Merrill Lynch, the No 1 US brokerage, highlighted the hit to financial institutions from US subprime mortgage defaults that have knocked global stocks lower and lifted the yen.
Trade was subdued on Friday as market players look ahead to readings on consumer sentiment later in the day, including Germany's forward-looking GfK index for November and the Reuters/ University of Michigan final survey for October.