Dollar hovers near record low

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In contrast, the euro was supported by comments by ECB Governing Council member Axel Weber, who said on Wednesday that market expectations for the European Central Bank to cut rates failed to take into account the dangers of higher inflation.

The German economy is solid and the euro zone economy is only likely to slow to just below its long-term potential rate this year, Weber said. The ECB would act if long-term inflation expectations seemed to be rising significantly, he said.

"The euro is drawing money because prospects of a near-term rate cut have been pushed back and fundamentals are solid, while the dollar is destined to fall further as the market believes U.S. credit jitters are far from being resolved ," said Hideki Amikura, a forex manager at Nomura Trust and Banking.

Amikura said the euro could extend gains to around $1.55 in the next couple of months, with the European Central Bank seen avoiding cutting interest rates at least until then.

A trader at a big Japanese bank said: "The broad dollar weakness will continue, with the likelihood of the euro hitting more record highs because there are reasons to buy the single currency after the hawkish remarks by Weber."

Surging commodity prices continued to underpin currencies such as the Australian dollar which traded near a 24-year peak against the dollar of $0.9460 after strong investment data underlined robust demand in the economy and kept alive chances of more interest rate hikes.

The New Zealand dollar was also near a 23-year post-float peak of $0.8215 marked on Wednesday.

The euro eased 0.1 percent to $1.5110, just off a record high of $1.5144 struck on Wednesday.

The dollar index, which tracks its performance against six major currencies, was little changed at 74.240, near a record low 74.070 hit on Wednesday.

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