The euro has shot up to over $1.38 for the first time since its creation in 1999, after weaker than expected retail sales in the US added to concerns about the country's economy. The European currency touched $1.3812 this afternoon.
It fell back slightly to trade at $1.3787 this evening.
The dollar's fresh falls came after the US Commerce Department revealed that US retail sales fell unexpectedly in June as Americans cut back their spending amid a persistent housing slump and higher petrol costs.
This week, the euro has steadily risen to record heights with economic growth in the euro zone widely expected to outpace other major economic powers such as the US and Japan this year. Concerns about the troubled US sub-prime mortgage sector have also weighed heavily on the dollar.
Earlier, EU Economic and Monetary Affairs Commissioner Joaquin Almunia said the soaring euro had had little impact on the euro zone economy.
'The impact has not been huge,' Almunia told a conference in Brussels. But he also reiterated the long-standing position agreed among the Group of Seven countries that 'we must remain vigilant on exchange rates'.
