Dollar set a new record hitting Friday an all-time low of $1.3330 per euro. Against yen, dollar is at the lowest level in 4-1/2 years dropping to 102.15 yen pre dollar.

 

Trading was remarkably thinner due to Thanksgiving holiday on Thursday.

 

The drop came on the news that China had drastically reduced its holdings of dollar assets.

"I think the China story's going to have some legs. People don't really need any reasons to sell the dollar. If they are given a reason it's just putting petrol on the fire," said Luke Waddington, head of forex trading at Royal Bank of Scotland in Tokyo.

 

Stronger Asian currencies could dampen exporters' earnings and hurt the regional stock markets. Tokyo's benchmark Nikkei average index dropped 0.61 percent on fears that yen appreciation might hurt exporters.

 

Gold reached 16-year high on dollar weakness and traded at $454.10 an ounce.