The euro hit $1.32 against the US dollar this morning and was this evening heading towards the $1.325 mark.
The single currency was trading at a record high of $1.3244 in late European trading - the third day in a row of record highs for the euro.
Against the yen, the dollar fell to as low as 102.41 yen - the lowest since early 2000. The US currency has also slumped to the lowest level for almost a decade against the Swiss franc.
The dollar sell-off has gathered pace over the week on concerns over the US current account and budget deficits coupled with news the Russian central bank is considering switching more currency reserves into euro, to the detriment of the dollar.
Meanwhile, EU Economic and Monetary Affairs Commissioner Joaquin Almunia has warned that the dollar shows no sign of reversing its current slide.
He also told a conference in Brussels that the high price of oil could hit global economic growth.
Almunia stood by the European Commission's 2004 growth forecast of 2.5% for the EU as a whole, but said European economic activity was 'very unsatisfactory'.
