The euro crossed above the key $1.25 area against its US counterpart today for the first time since the single currency's 1999 launch.
The euro's move came as trade deficit concerns drove the US currency to or near multiyear peaks against a host of currencies.
In thin holiday trade, the euro reached a high of $1.2511. Worries that low US interest rates won't be enough to continue to draw foreign demand for US assets, flows viewed necessary by many to offset a record US trade gap, have continued to send the dollar south.
Low-inflation readings and some US economic data that fell short of expectations when released last week reinforced ideas the Federal Reserve may be able to wait several months before nudging US rates higher.
Geopolitical uncertainty and the first reported case of US mad-cow disease have only aggravated the bruised dollar.
The dollar traded as low as 106.92 yen, its weakest value since early December and within flirting distance of a three-year low of 106.75 yen per dollar.
A seven-week high for Japanese stocks helped feed a rally for the yen earlier today.
The dollar had stabilised against its Japanese rival in recent weeks, largely on suspected intervention on the part of officials there to curb the dollar's drop and help preserve the competitiveness of Japanese exports.
AFP