The dollar has gained a new head of steam in the past few sessions by breaking through its previous high for 2005 against the euro and then last year's peak, prompting a variety of accounts to bail out of short dollar positions.
The Federal Reserve's 16-month campaign of steadily tightening policy has taken overnight interest rates to 4 percent, and with the central bank expected to keep pushing rates up investors have increasingly shifted funds to the dollar.
"The baseline trend for dollar appreciation is unchanged," said Kikuko Takeda, a currency analyst at Bank of Tokyo-Mitsubishi. "The main issue for the market is the euro."
Widespread riots in France, along with pressure from euro zone finance ministers and business leaders for the European Central Bank not to raise rates, have also soured sentiment on the single currency.
The violence in France extended to a 13th night as youths threw Molotov cocktails at police and ignited more vehicles in several cities, despite the imposition of curfews.
Playing a role in the euro's decline is talk in the market of US companies repatriating big amounts of overseas earnings, especially from Europe, to take advantage of a special tax break that expires at year-end under the Homeland Investment Act.
Underscoring the euro's plight, the currency fell on Tuesday through its January 1999 launch level at $1.1747 to a low of $1.1710, its weakest since November 2003.
Since Friday the euro has tumbled through its previous low this year near $1.1870, quickly followed by the 2004 low around $1.1760. The euro has shed about 16 cents versus the dollar, or 13 percent, over the course of the year.
The euro was fetching $1.1765, down from $1.1780 in late New York trade.
Traders said suspected buying to protect option barriers at $1.17 may provide support for now.
The dollar was little changed at 117.30 yen, about a full yen below its peak of 118.38 hit on Monday, the highest since August 2003.
The yen showed little reaction to US President George W. Bush's call for China to do more to allow the yuan to appreciate, saying the trade imbalance between the two countries was "bothersome".
The remarks come before a Bush visit to Beijing later this month.
In the past, traders often bought the yen as a proxy for any appreciation of the yuan and Asian currencies against the dollar.
But with China keeping the yuan on a tight leash after the July 21 revaluation, many speculators have given up bets on a quick gain and dumped the yen, contributing to the Japanese currency's slide.
As for the euro, analysts said the single currency would stay under pressure with no significant technical support until $1.1590, a key retracement level of the euro's entire rise from 2000 to 2005.
"Technical momentum after a break of $1.1870 to the downside should continue to drive euro/dollar over the next few weeks, with the widespread violence in France continuing to loom in the background," currency strategists at J.P. Morgan Chase said in a note to clients.
Trading was subdued with no major economic data set for release on Wednesday except for German trade data for September. ECB President Jean-Claude Trichet is slated to speak at a news conference at 1145 GMT.
After last week's ECB policy meeting, Trichet's failure to give a clear indication the central bank is closer to raising rates from a historic low of 2 percent helped spark euro selling. Speculation had mounted for an ECB move as soon as December.