The dollar has slipped to its lowest in more than three months against a basket of major currencies as the euro and sterling have climbed, putting the greenback on track for an almost 10% fall over the year - its worst showing since 2003.
The dollar started 2017 on a high, with the index that tracks it against a basket of six major currencies hitting its strongest in 14 years on hopes that new US President Donald Trump would implement pro-growth, pro-inflation measures.
But it has fallen back on doubts about Trump's ability to push through those policies.
And it has also lost out as growth has picked up outside the United States, with other countries'central banks moving towards tighter monetary policy, lessening the gap between the Federal Reserve and others.
"We are seeing synchronised global growth, in particular a very strong growth recovery in the euro area, which is leading the ECB (European Central Bank) to gradually normalise policy,which is helping the euro," said Societe Generale currency strategist Alvin Tan.
Tan added that the dollar had become overvalued against the euro, yen and sterling at the start of the year and so another part of the reason for its weakness in 2017 was a mean reversion in valuation.
The euro, which has hit a three-month high of $1.1982, up a quarter of a percent on the day, has climbed almost 14% against the dollar in 2017 - its best performance since 2003.
The common currency showed little immediate reaction to Italy's announcement that it will hold an election on 4 March, as such an outcome had been anticipated.
Although sterling is still more than 10% down against the dollar since the June 2016 vote for Britain to leave the European Union, it has climbed 9.5% in 2017 - its strongest year since 2009.
Today sterling has climbed half a percent to a three-week high of $1.3511.
Meanwhile, the euro is down 0.1% against the pound at £0.8873.