The dollar hit a two-month low against the euro and a six-week trough versus the Swiss franc on this morning, sliding for a second day after China's central bank chief said it has a clear plan to diversify its $1 trillion in foreign exchange reserves.
The dollar and other major currencies also took a hit against the yen after Bank of Japan Governor Toshihiko Fukui said he was concerned about a sharp unwinding of carry trades in which investors borrow the low-yielding Japanese currency.
But the dollar pared some of those losses on data showing Japanese machinery orders unexpectedly fell 7.4 per cent in September, casting more doubts on a Bank of Japan interest rate increase before year end.
With short-term Japanese rates at just 0.25 per cent, a variety of investors have borrowed in yen and used the money to purchase higher-yielding currencies in the carry trade.
Such trades helped to push the euro to an all-time high against the yen on Thursday and the pound to an eight-year peak.
The euro was up 0.3 per cent at $1.2860 after earlier climbing to $1.2868 on electronic trading platform EBS, the highest since the start of September.
The dollar changed hands at 1.2390 Swiss francs after falling to around 1.2375 francs, the lowest since late September. The dollar slipped 0.3 per cent to 117.55 yen but was off the day's low of 117.37 yen.
The euro inched down to 151.15 yen, backing away from the record high of 151.48 yen hit on EBS the previous day.