The dollar hit a two-year high against a basket of currencies today as concerns about a worsening global economy prompted investors to cut risky assets.
The yen hit a six-year peak against the euro and a seven-month high versus the dollar as Japanese investors continued to repatriate overseas investments they had made in recent years to make up for low domestic yields.
Deteriorating financial conditions in emerging markets, which have prompted governments such as Hungary to take action to protect their economies, prompted investors to rush to the dollar, the world's most liquid currency, and the safe-haven yen.
The euro slipped 0.3 per cent from late US trade to $1.2814 In early Asian trade, the European single currency fell as low as $1.2726, its lowest since November 2006, on trading platform EBS.
The dollar index, which measures the US currency's value against a basket of six currencies, edged up 0.2 per cent to 85.631 after hitting a two-year peak of 86.070.
The euro slid as low as 123.40 yen its lowest since 2002, before rebounding to 125.14 yen, down 0.3 per cent on the day.
The dollar was nearly flat at 97.66 yen after hitting a seven-month low of 96.85 yen on EBS.
In late afternoon trade, Tokyo shares recovered from an earlier plunge to a near five-and-a-half year low after a report saying the US is mulling a plan to shore up the troubled housing sector. That helped trim the yen's gains, traders said.
Reuters