The dollar plumbed fresh depths across the board today as liquidity-boosting measures launched by the Federal Reserve over the weekend failed to quell worry about the health of the US economy and financial sector.
The dollar fell as low as 95.77 yen according to Reuters data, and set a historic trough at 0.9637 Swiss francs after breaking below parity last week.
The euro rose as high as $1.5904, having already added around 4 per cent in the first two weeks of March, roughly doubling its year-to-date gains. It later pared those gains to $1.5768 by 11.21am.
Stricken Bear Stearns is being bought by rival JP Morgan Chase for just $2 a share - versus Friday's closing price above $30 - in a sign that even heavyweights of the financial sector can be brought down by US subprime mortgage debt and the resulting credit crunch which took hold last summer.
The Federal Reserve took more emergency measures to stem the fast-spreading financial crisis, cutting its discount rate by 25 basis points to 3.25 per cent yesterday and opening up discount window lending to major investment banks, a tool not used since the Great Depression.
But the moves did not stop the dollar from tumbling as much as 3 per cent to below 96 yen, its lowest since 1995 and bringing year-to-date losses to more than 13 per cent.
"The dollar is suffering from the dual shock of an economic slowdown and a financial crisis," said Teis Knuthsen, head of FX research at Danske Markets in Copenhagen.
"Until we see signs of an improvement on one of these two fronts, ideally both, then the dollar will remain under more pressure," he added.