The dollar crashed through key barriers to a record low on the euro and a 7-month low on the yen today, as concern mounted a forthcoming G20 finance ministers' meeting would do little to halt its slide.
Many analysts expect the G20 officials to put new pressure on China to let its yuan currency rise against the dollar, a move seen pushing up Asia currencies against the greenback, which was causing dollar selling pressure in anticipation.
Policymakers are jostling for position ahead of the meeting and US Treasury Secretary Mr John Snow, on a visit to London, said the US could not impose currency values but countries could not devalue their way to prosperity.
"It's difficult to go against this move in the short-term, we are seeing the new range above $1.30 -- you have all these factors such as the current account deficit working versus the dollar," said Mr Johan Javeus, FX strategist at SEB.
By 10:15 a.m., the dollar bought 104.65 yen after touching 105.53, its lowest level since April and sliding 0.7 per cent from New York levels. Against the euro, the dollar stood at $1.3030 after briefly falling to $1.3035, according to Reuters data.
Traders said asset managers were selling dollars and buying all Asian currencies and that options barriers around $1.3010 had been broken, exacerbating the euro's move higher.
Most players expect the dollar to remain under pressure for as long as the market focuses on the US current account deficit and believes Washington wants a weaker dollar to curb it.
Analysts say any change in the dollar's downtrend would come only if Washington takes clear steps to reduce the deficit or if the Federal Reserve keeps raising interest rates - making dollar assets more attractive.