The dollar tumbled to a three-year low against a basket of currencies on Thursday, with market players selling the greenback to buy buoyant risky assets in a move that threatens to drive the dollar index towards its historic low. The dollar has taken a hit in the past few days as investors have flocked back to higher-yielding currencies, commodities and equities after a brief shake-out earlier in the week.
The chart outlook for the greenback is looking dire after it tumbled through the 74.17 trough touched in November 2009, a move that may spark a run towards the 70.698 all-time low hit in 2008. The dollar has suffered the most against commodity-linked currencies such as the Aussie and Canadian dollars, as well as emerging markets currencies such as the Singapore dollar as authorities in Asia allow more currency strength to fight inflation.
Yet Asian authorities have regularly intervened to buy dollars to limit the gains in their currencies, including on Thursday. The dollar index fell 0.6 percent from late New York trade to 73.898, the lowest since August 2008 - just before it surged during the Lehman Brothers collapse as investors scrambled for safe-havens.
The euro pushed to a 16-month peak but has lagged the broader move due to the ongoing worries about the eurozone crisis, underscored this week by reports that Greece may restructure its debt in coming months. The euro was up 0.7 percent at $1.4612 after jumping to a high of $1.4618 on EBS, triggering stops on the way up after breaching an option barrier at $1.4550 and the January 2010 high at $1.4583.
The single currency also appears to be poised for further gains on the charts, with the path clearing for a run at the 2009 peak at $1.5145. The Australian dollar was up 0.6 percent at $1.0756 after pushing as high as $1.0772 on Thomson Reuters Matching - the highest since being floated in the early 1980s. For the week, the Aussie was up 1.8 percent, making it the best performer among G10 currencies. The dollar dipped 0.7 percent against the yen to 81.95 yen, breaking chart support with the fall below 82.00 - the intraday high reached on March 18 when the G7 intervened to sell the yen. The yen has also slid broadly with the dollar.