The dollar hit a nine-year low against a basket of major currencies amid ongoing concerns over the US ability to fund its current deficit.
Currency dealers shrugged off recent upbeat US economic data and focused on speculation Washington was happy to see a weaker dollar as it would help narrow the deficit.
The dollar stood at $1.2948 per euro, close to the all-time low of $1.3005 set last week.
Many investors suspect Washington may want to engineer a weaker dollar to fund the deficit despite its official strong dollar policy.
On Friday, a US Treasury official said global financial markets were operating in an "orderly" way, declining to comment on the level or direction of currency movements.
"They define a strong dollar as set freely by markets. They see the adjustment of the current account deficit requires a significant depreciation of the dollar and they accept to see that happening to prevent future disorderly fall in the dollar," one currency strategist said.
Euro zone finance ministers meet in Brussels later today. The focus is on whether they would support or escalate warnings from European Central Bank President Mr Jean-Claude Trichet, who said last week recent euro moves were "brutal" and "not welcome".