The US dollar has fallen to a fresh all-time low as investors look for a cheaper alternative to the rouble, the euro and the British pound.
The dollar is down nearly 3 percent against the greenback so far this year, according to data compiled by Bloomberg.
The currency’s weakness comes amid growing worries about the country’s ability to repay its international debt.
It was down 0.3 percent against a basket of currencies on Monday as investors bought U.S. Treasuries to secure a more solid financial outlook.
The decline has prompted the Fed to increase interest rates and push up the Fed Funds rate, which is a tool used to help stimulate the economy.
The Fed has been trying to bring the unemployment rate below 6 percent.
The Fed Funds is one of the tools it uses to push up inflation.
The rate was also cut to zero in November after it began a two-day meeting with a small group of central bankers.
The move was intended to ease the pressures on the economy and to signal the Fed will likely move to raise rates again next month.
The sharp fall in the dollar follows the Fed’s decision to start easing its benchmark rate by another level to the record low of 1.25 percent.
The U.N. Financial Stability Board last week also lowered its growth forecast for the U.K. by a quarter of a percentage point to 3.1 percent.
“The dollar has come to resemble a dead horse,” said James B. Lehr, a senior vice president at Bank of America Merrill Lynch in New York.
The Dow Jones Industrial Average closed up 0.8 percent, the S&P 500 gained 0.7 percent, and the Nasdaq Composite added 0.1%.
The dollar gained on Tuesday to 103.20 cents US, down from 103.27 cents US on Monday.
The euro rose to $1.2795 from $1,2792.50 and the pound to 68.24 pounds from 67.99 pounds.
The euro was trading at 70.10 euros per dollar.
The pound weakened to 67.94 pence from 69.25 pence, and it lost about 0.6 percent against its greenback.
The U. S. dollar fell to 94.55 pence US, from 95.39 pence.
The dollar index is a broad gauge of the U: euro, yen, British pound, Australian dollar and Canadian dollar.