The dollar steadied after tumbling to a record low against the euro and stuck near a 26-year trough against sterling today as investors feared that growing US subprime mortgage woes could spread to the wider economy.
The dollar's broad decline accelerated early in today's session in Asian markets, especially against the low-yielding yen, as investors cut back on their exposure to higher-yielding but riskier assets.
The euro steadied at $1.3745 after rising as high as a record $1.3787 in early trade in Asia on electronic trading platform EBS.
Sterling stabilised at $2.0255 but stayed near a 26-year high of $2.0282 hit the previous session.
The dollar stood at 121.40 yen after tumbling to a one-month low of 120.99 on EBS in earlier in the session.
The dollar's sell-off was sparked by a report from credit rating agency Standard & Poor's that it might downgrade $12.1 billion (€8.9 billion) in subprime-related debt. Subprime loans are extended to borrowers with poor credit.
Escalating subprime mortgage problems drove US share prices down the previous day, squeezing investor ability to take risks.