The head of the Organisation for Economic Cooperation and Development (OECD) said today the speed of the dollar's decline rather than its actual level was a cause for concern.
Mr Donald Johnston, on a visit to Turkey, also said the dollar's weakness was affecting many countries, including nations outside euro zone, so spreading the impact widely.
"Obviously it's a matter of concern . . . I think it's the speed [of the decline], from what our economists say, rather than the level," Mr Johnston told reporters.
"I think everyone is surprised by the pace with which the dollar has retreated against the euro and other currencies as well, which has been seen by the economic community as a mitigating factor because it is not just against the euro."
This morning the euro held a cent below yesterday's record high against the dollar after a warning shot from European Central Bank chief Mr Jean-Claude Trichet helped slow its rally.
Mr Trichet's warning that "brutal" foreign exchange moves were unwelcome knocked the euro back from a record peak around $1.2898 , braking a rally of around 13 per cent since early November.
Markets are now waiting to see what hints US Federal Reserve Chairman Mr Alan Greenspan will give about the US economy and the outlook for interest rates at an event in Germany later in the day.