Investors gave the dollar a wide berth early on Thursday as dovish comments from Federal Reserve Chair Janet Yellen continued to resonate, dampening demand for the currency.
The dollar index last stood at 94.840 .DXY, having come within a whisker of a five-month trough of 94.578 set two weeks ago.
Citi analysts said the dovish message in Yellen's speech on Tuesday along with month-end adjustment led to the continuation of light dollar selling.
As a result, the euro was back within striking distance of its 2016 peak of $1.1377 EUR=. It last sto od at $1.1331. Against the yen, the greenback bought 112.49 JPY= after coming close to breaking below 112.00.
"The USD sell-off is broadening, and risks are that it continues to disappoint bulls in the near term," analysts at ANZ wrote in a note to clients.
"But as we look ahead, we wonder about the sustainability of this trend. So we find ourselves in a position where the stronger USD cycle does not look complete, yet the near-term triggers of a resumption of this cycle are scarce."
ANZ predicts the euro will ease back to $1.0800 by year-end, but it saw the dollar weaker on the yen at 105.00.
Yellen on Tuesday said the Fed will proceed cautiously in raising interest rates and highlighted external risks such as slower global growth.
Chicago Fed President Charles Evans on Wednesday underscored that caution saying a "very shallow" series of interest rate hikes over the next few years is appropriate to buffer the U.S. economy from outside shocks and the risk of inflation slipping too low.
A dovish Fed and ultra-loose policies in Japan and Europe combined to give higher-yielding currencies a big boost.
In the short term, traders expect the market to consolidate as U.S. nonfarm payrolls and a survey on China's manufacturing activity on Friday loomed large.
(Editing by Richard Pullin)