The euro surged to a new record of $1.4095 this evening as Tuesday's big cut in US interest rates continued to take its toll on the US currency.
The dollar hit the new record after a speech from Federal Reserve chairman Ben Bernanke.
He said today the central bank opted for a one-half percentage point cut in the benchmark interest rate this week in a bid to stay ahead of tightening credit conditions.
'We took that action to try to get out ahead of the situation and try to forestall potential effects of tighter credit conditions on the broader economy,' Bernanke told the US House of Representatives Financial Services Committee.
Gold prices also surged to its highest level in 27 years today.
This morning the euro went above €1.40 for the first time since it was introduced in 1999.
While the strong euro may cut some import costs, it will also have a negative effect on exports as European-made goods become more pricey.
The US is one of Europe's, and Ireland's, largest trading partners.
On Tuesday, the US Federal Reserve cut its main rate by half a percentage point to 4.75% to boost the flagging US economy and ward off the global credit squeeze.
A reduction US rates undermines the dollar because assets in other countries become more attractive for investors.
The euro is also trading at 70p against sterling for the first time in 18 months this evening.
The price of gold broke through $730 per ounce today in London, surging to $738.60.
The precious metal is gaining support from the weak dollar, which makes dollar-denominated gold cheaper for investors using other currencies.
The metal is also benefiting from record high oil prices, which have raised fears of inflation.
Gold is seen as a store of value and a hedge against inflation.
