The dollar's broad slide paused after it hit its lowest in a year against the Australian and New Zealand dollars on Wednesday, but it held near its 2009 low on the euro, as investors sold the low-yielding greenback in a renewed shift to riskier assets.
The dollar also remained vulnerable near the year's low against a basket of currencies, with talk of model fund selling on the greenback, while the yen recovered ground after touching its lowest in a month on the Australian dollar.
Falling regional shares and US stock futures tamed risk-seeking moves but traders and analysts said the dollar was now within sight of some important support levels on the charts, including its July low of 91.73 yen, and $1.4550 and beyond against the euro.
"It's largely technically related dollar selling across the board," said Sue Trinh, currency strategist at RBC Capital Markets in Sydney. "Gold's rally through $1,000 has brought a whole lot of systematic model-related US dollar selling out of the woodwork."
The dollar index shed 1 percent on Tuesday to hit a one-year low of 77.047, after breaking major chart support. Sentiment towards the dollar took a knock on talk that China is concerned about US macro-economic policies and a United Nations report calling for a new world reserve using several currencies. That fuelled speculation foreign central banks might be diversifying reserves away from the dollar to other currencies, or perhaps even gold.
Masamichi Koike, joint general manager of the trading group at Sumitomo Mitsui Bank, said the market was turning back to trades based on economic recovery hopes that started in March and was playing down the potential risks to recovery highlighted in the past couple of months by sharp falls in Chinese shares.
"The dollar is set to weaken with euro/dollar eyeing the December high above $1.47," Koike said.
"But given the view that the market is only returning to the previous risk asset rally which had already lifted asset prices to 80 percent out of 100 percent potential, the room for the dollar to slide from here is not that big, either."
Spot gold rose as far as $1,007.45 on Tuesday while the CRB commodities index gained 2.02 percent. All had helped the high-flying Australian dollar push higher.
It briefly hit a fresh one-year peak of $0.8662 and touched its highest in almost a month at 80.00 yen. But softer-than-expected retail sales then took the wind out of its sails with the data seen as lessening the chance of a hike as early as October, and it slipped 0.3 percent on the day to $0.8593. The New Zealand dollar, another currency favoured as a risk trade against the low-yielding dollar and yen, hit a one-year high at $0.6993 before slipping to stand 0.1 percent down on the day at $0.6951 and 64.16 yen.
The euro trimmed earlier gains and stood at $1.4489, up 0.1 percent on the day. It rose 1 percent on Tuesday when it reached as far as $1.4535 at one stage, the highest this year. Options traders said options triggers were set at $1.4550 while chart targets were seen at $1.4620, a 61.8 percent Fibonacci retracement of its fall from above $1.60 in July 2008 to its October low near $1.2330.
The dollar was holding its ground for the moment against the low-yielding yen, after shedding 0.8 percent against it on Tuesday. It was steady on the day at 92.38 yen.