The US dollar's slide against major world currencies continued on Tuesday.
Investor concerns have shredded the dollar's value
The dollar dropped to an 11-year low against the UK pound, an all-time euro low, and also fell against Japan's yen.
The falls have been prompted by factors including widening US trade and current account deficits, low interest rates and the threat of terrorist attack.
The euro reached $1.2812 before slipping back and was at $1.2767 in late trading in New York. The dollar also touched $1.8280 against the pound.
The pound later eased back to $1.8238 in late trading, but was still two cents up from late Monday in New York.
The euro is now homing in on the next pyschological level of $1.30.
On Sunday, Federal Reserve governor Ben Bernanke said that the risk of a dollar crisis was "quite low" against a basket of world currencies.
But against the yen the dollar dropped to 106.09, its lowest since September 2000.
The Japanese Government was reported to have intervened in the currency markets on Tuesday in an attempt to prevent the yen from continuing to strengthen.
A stronger yen makes life more difficult for Japanese exporters, whose products become more expensive for US importers.
Gold meanwhile pushed above $430 an ounce for the first time since 1988 on Tuesday but then closed lower
on profit-taking as the battered dollar staged a late rally.
The metal, which is seen as a haven for investors, surged 20% in value last year.
The trigger for the recent dollar weakness was the hint from the US Federal Reserve that interest rates were unlikely to rise from current low levels any time soon.
US interest rates are at a 45-year-low as the central bank has held its key overnight rate at 1% since June 2003.
That means investors can find better returns elsewhere and are unlikely to buy US bonds, which are being sold to finance the country's ballooning budget deficit.
It also seems that the administration of President George W Bush is unconcerned about the slide in the currency because the cheaper US goods become, the more demand there will be for exports.
While that may spell good news for the US economy, it may have a significant effect on European hopes for a recovery.
According to economists at Societe Generale bank in London, "the impact of the latest euro rally is likely to be felt soon, and a further rise may jeopardise all hopes of an upturn in eurozone activity".