The dollar fell within a cent of this year's all-time lows against the euro today as investors hounded it lower on the growing belief that it will have to weaken to help correct the US current account deficit.
The dollar's tumble brought it to its lowest levels since mid-June against the euro and the Swiss franc, while the greenback also teetered at three-year lows against the yen for the second day in a row.
The falls came amid a dearth of economic data but on the heels of European policy makers' statements, led by European Central Bank President Wim Duisenberg, saying a dollar fall was "unavoidable".
Recent calls from US President George W. Bush for a "level playing field" of currency policies for US companies have added to dollar bearishness that has snowballed since the Group of Seven called last month for increased foreign exchange flexibility.
"Everyone hates the dollar," said Lee Mr Ferridge, head of global currency strategy at Rabobank.
"There's a view going around that the stronger U.S. growth actually hurts the current account more so therefore it's negative for the dollar.... Everyone is one-way (on the dollar) and when everyone is one-way, it really happens."
By 9 a.m., the dollar had fallen around half a per cent to $1.1839, within a cent of May's all-time lows above $1.1930.
Many traders see little possibility to reverse the dollar's downward trend, particularly after the greenback failed to sustain Friday's rally in the wake of US employment data showing surprise growth in jobs - which markets had been awaiting for months.
Dealers also continue to revisit the September 20th statement by the G7 industrial countries that called for flexibility in exchange rates, putting increasing focus on the US current account deficit as the main adjustment being targeted.
Traders were also nervously awaiting U.S. Treasury Secretary John Snow's appearance at a Senate hearing on foreign exchange policies next week, and a summit meeting of Asia-Pacific Economic Cooperation in Bangkok later this month.