LONDON (AFP) - The dollar hovered close to eight-month lows against the euro and a four-month trough against the yen amid worries about the US economic outlook.
The single European currency stood at 1.2620 dollars from 1.2613 late on Thursday in New York.
The dollar was quoted to 107.69 yen against 107.46 on Thursday.
Dovish comments from Federal Reserve Governor Ben Bernanke weighed on the dollar.
Bernanke said higher oil prices have exercised a "significant shock" on the US economy, though he maintained that the economic consequences will be "manageable."
"The dollar remains on the backfoot against majors, with comments from the Feds Bernanke surprisingly dovish, noting that oil prices have exercised a 'significant shock' on the US economy," BNP analysts said.
Meanwhile San Francisco Fed President Janet Yellen said the US economy was not "completely out of the woods just yet".
She said high oil prices, business caution, and the high trade deficit might cause economic activity or labor market activity to slow down. This might cause the Fed to "consider pausing" in the process of raising rates.
The dollar has been falling since the end of last week as fears over how the United States will fund its ballooning current account and budget deficits came to the fore once again, especially at a time when record oil prices are likely to dampen growth.
The dollar fell Thursday after the Conference Board said its September index of leading economic indicators, forecasting activity in the coming months, dipped 0.1 points from August to 115.6, the fourth consecutive monthly decline.
The neck-and-neck US presidential race was also making the market cautious about the dollar, traders said.
The dollar slumped to as low as 107.35 yen on Thursday, the lowest level since June 25.
"The dollar's bias remains bearish," said Toru Sasaki, chief currency strategist for JP Morgan Chase in Tokyo.
"It's obvious the US unit's slide was not driven by positive sentiment over the yen," he added.
The pound was under pressure after a preliminary official estimate showed British gross domestic product growth slowing sharply to 0.4 percent in the third quarter from 0.9 percent in the second.
The pound fell to 1.8250 dollars in the wake of the figures, from 1.8296 shortly before their release.
The euro was changing hands at 1.2620 dollars from 1.2613 late on Thursday in New York, 135.90 yen (135.55), 0.6916 pounds (0.6901) and 1.5385 Swiss francs (1.5355).
The dollar stood at 107.69 yen (107.43) and 1.2188 Swiss francs (1.2174).
The pound was at 1.8250 dollars (1.8269), 196.52 yen (196.25) and 2.2244 Swiss francs (2.2247).
On the London Bullion Market, the price of an ounce of gold stood at 422.30 dollars against 422.50 on Thursday afternoon.
10/22/2004 - 11:37 GMT - AFP