The euro rose above $0.98 for the first time in more than two years this morning as doubts over the appeal of US assets and the strength of the US recovery accelerated the dollar's losses across the board.
Even a bout of dollar-buying for yen by the Bank of Japan failed to halt downward momentum in the US currency, which also hit 2 1/2 year lows against the Swiss franc and 17-month lows against sterling.
The dollar has shed six cents against the euro in the last month alone, and analysts say the psychological one-to-one level could be reached within weeks, or even days.
This morning the euro rose to $0.9816. "It's just one way traffic," said a trader at a US bank.
"Breaking $0.96 last week was a massive level. There's no end in sight for now.
Concern that the dollar's slide could harm Japan's export competitiveness prompted Japanese authorities to wade into the foreign exchange market to sell yen for dollars for the first time in three weeks.
Japan's action lifted the dollar more than a yen in Asian trade, but the greenback slipped back to 121.30 yen in Europe, little more than half a yen above seven-month lows set on Friday.