The dollar held more than a cent above a record low today amid market worries over comments out of Europe about the euro's recent rise.
Euro zone central bankers have signalled their displeasure in recent days about the euro's rapid appreciation, and analysts said the market was now looking to a speech by European Central Bank President Mr Jean-Claude Trichet later for further guidance.
Italian Economy Minister Mr Domenico Siniscalco confused the market when he appeared to suggest that euro zone central banks were discussing possible intervention on the euro/dollar.
His ministry later clarified the comments saying he was referring to the need for co-ordination between monetary authorities, but analysts were interested to hear what comments ECB president Mr Jean Claude Trichet might make when he speaks in Italy later today.
Mr Trichet's description of the euro's rise as "brutal" triggered profit-taking in the currency earlier this week.
ECB vice president Mr Lucas Papademos added his name to the petition against euro strength today, repeating in Tokyo the central bank's stance that it did not welcome excess volatility in the currency market.
The Fed's fourth rate increase this year took US rates to 2 per cent, the same as the euro zone, and was accompanied by an indication it would press on with its tightening campaign.
Worries about the ability of the United States to finance the shortfall in its trade balance have been a major factor behind the dollar's recent downturn, as investors are concerned about the United States' ability to attract enough foreign investment to offset the gap.