The dollar dropped to a near 10-month low amid rising concerns about quantitative easing measures expected to be announced by Federal Reserve head Ben Bernanke today.
The dollar dropped to a low of $1.4089 against the euro as the latter saw its highest rally in more than eight months. Australian dollar also surged on reports of soft inflation data to be released by the Fed and after increased purchase of the euro by Asian central banks.
At 0909 GMT, the dollar index slipped 0.2 percent at 76.479, which is near a 10-month low of 76.259 it hit the day earlier.
The euro reached eight-month peak against the dollar on Thursday when it traded at $1.4123. If calculated in upside targets, the euro reached a late January high at $1.4195 and then traded at $1.4374, which is 76.4 percent retracement of the euro's dip from its November 2009 peak.
The Australian dollar reached a steady rate of $0.9941, after hitting a 28-year peak of $0.9994.
The dollar dropped 0.3 percent to 81.23 yen, which is still higher than its 15-year low of 80.88 yen on Thursday. The previous record dip was 79.75 yen in April 1995.
The U.S. Treasury Department is expected to issue a report Friday that will examine the currency practices of other countries. There are speculations on whether the U.S. administration will label China a currency manipulator, a move that could seriously undermine the relations between the two largest economies of the world.
Japan has already expressed its intentions of discussing the currency valuation issue during the G-20 meeting in South Korea next week.
