Dollar slumps to record low
Sterling pares recent gains vs euro, dlrThe New Zealand dollar jumped to a 23-year peak of $0.8186 before pulling back to $0.8156.
The dollar hit a record low of 1.0705 Swiss francs, while sterling climbed to a one-month high of $1.9892.
The U.S. currency fell 0.2 percent against the yen to 107.04 yen.
Market participants said that despite the dollar's beating against other currencies, traders were wary of picking up the yen because stock market gains may encourage risk taking and carry trades.
The rebound in stocks from their lows in January has helped revive risk appetite, prompting investors to fund purchases of high-yielding currencies like the Australian and New Zealand dollars with funds borrowed in the low-yielding yen.
Euro gains against the dollar pushed the single European currency to a six-week high of 161.43 yen before pulling back to around 160.50 yen, down around 0.1 percent on the day.
"I am not sure whether it should be called a revival of the carry trade, but currencies that are easy to buy are those from resource-producing countries. The same is true for Europe, when compared with the currencies of the United States and Japan," said a trader for a Japanese trust bank.
BERNANKE MAY BE KEY
Euro-zone rates are set to widen their advantage over those in the United States, helping the single currency to maintain its rate advantage over the dollar.
Traders said that expectations of more Fed rate cuts were bound to further injure the U.S. currency, and the only question was how many more Fed rate cuts are in store. The Fed is expected to slash rates by a half point in March to 2.5 percent.
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