The dollar fell sharply in Asia this morning, slumping to a two-year low against the yen and hitting record lows against the euro.

The greenback slipped to below ¥108 for the first time since June 2005 as continuing fears over the US economy dominated markets.

The euro, meanwhile, capped a string of recent records with a high of $1.4968, before dropping to $1.4918. The dollar also tumbled against the pound with a record low fixing of the dollar against the Chinese currency adding to the bearish sentiment plaguing the greenback. Market participants say the US currency will remain vulnerable to sell-offs given concerns about the deepening US sub-prime mortgage crisis.

Traders also said that a sell-off was sparked by the dollar slipping through the psycholigical SwFr1.1 barrier.

Sterling fell this morning after data showed economic growth was weaker in the third quarter than previously thought, increasing the chances of an interest rate cut in the near future. At 9.34am the pound was trading around $2.0580, down from around $2.0630 before the figures were released at 9.30am.

The dollar's slump came during thin trading because of a holiday in Japan on Friday as well as Thanksgiving in America on Thursday.

Meanwhile, the People’s Bank of China set the dollar/yuan central parity, the rate around which it lets the tightly controlled pair move, below 7.4 yuan for the first time.

Beijing has been letting the yuan rise steadily against the dollar since it abandoned its dollar peg and revalued the yuan in 2005. The Chinese currency’s appreciation has accelerated over the past six weeks.

The Singapore dollar, meanwhile, rose to a 10-year high against the U.S. dollar and in mid-afternoon trading in Asia was at 1.4420 to the US dollar.

The dollar's fresh low come after Tom Enders, the chief executive of Airbus, said: "The dollar’s rapid decline is life-threatening for Airbus".

The dollar fell sharply in Asia this morning, slumping to a two-year low against the yen and hitting record lows against the euro.

The greenback slipped to below ¥108 for the first time since June 2005 as continuing fears over the US economy dominated markets.

The euro, meanwhile, capped a string of recent records with a high of $1.4968, before dropping to $1.4918. The dollar also tumbled against the pound with a record low fixing of the dollar against the Chinese currency adding to the bearish sentiment plaguing the greenback. Market participants say the US currency will remain vulnerable to sell-offs given concerns about the deepening US sub-prime mortgage crisis.

Traders also said that a sell-off was sparked by the dollar slipping through the psycholigical SwFr1.1 barrier.

Sterling fell this morning after data showed economic growth was weaker in the third quarter than previously thought, increasing the chances of an interest rate cut in the near future. At 9.34am the pound was trading around $2.0580, down from around $2.0630 before the figures were released at 9.30am.

The dollar's slump came during thin trading because of a holiday in Japan on Friday as well as Thanksgiving in America on Thursday.

Meanwhile, the People’s Bank of China set the dollar/yuan central parity, the rate around which it lets the tightly controlled pair move, below 7.4 yuan for the first time.

Beijing has been letting the yuan rise steadily against the dollar since it abandoned its dollar peg and revalued the yuan in 2005. The Chinese currency’s appreciation has accelerated over the past six weeks.

The Singapore dollar, meanwhile, rose to a 10-year high against the U.S. dollar and in mid-afternoon trading in Asia was at 1.4420 to the US dollar.

The dollar's fresh low come after Tom Enders, the chief executive of Airbus, said: "The dollar’s rapid decline is life-threatening for Airbus".

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