The U.S. dollar hit a nine-week low Thursday against the euro, which rose to $1.3434 due to higher oil prices, a sell-off in U.S. Treasury bonds and nervousness over upcoming U.S. trade figures.
The dollar's downward drift in European trading followed renewed losses in Tokyo and New York, where the 12-country euro bought $1.3407 late Wednesday.
The dollar was stable at a one-month low against the Japanese yen at 103.93 yen, but it fell to 1.1535 Swiss francs from 1.1565 and 1.2011 Canadian dollars from 1.2045. The British pound bought $1.9279, up from $1.9269 late Wednesday.
Weighing on the dollar were remarks by Japanese Prime Minister Junichiro Koizumi to a parliamentary committee about Japan's need to invest in various currencies. Japan has the world's largest foreign exchange reserves, with most of its holdings in U.S. Treasury bonds.
"I think it's necessary to have diversity. At the same time, taking into account what is profitable and what is safe, the overall situation must be considered," Koizumi said.
The remark was a reiteration of the government's stance, not a new policy, but the dollar dipped anyway.
The market also awaited the speech by Federal Reserve Chairman Alan Greenspan on globalization. Greenspan was expected to reiterate his expectations for solid growth for the American economy and subdued inflation.
Expectations among traders that U.S. trade data Friday will show the deficit remaining high in January are weighing on the dollar. Pressure on the dollar also is coming from rising oil prices, which briefly topped $55 a barrel on Wednesday.
Market concern over the U.S. trade and budget deficits have dragged the dollar down since late last year, when the euro shot up from about $1.20 in September to an all-time high of $1.3667 at the end of December. The dollar has recovered slightly since, but has remained within a few cents of the record.