The European single currency surged past 1.43 dollars for the first time in its short history on Thursday, lifted by the prospect of lower interest rates in the United States.
The euro leapt as high as 1.4305, beating the previous record of 1.4283 dollars that was set on October 1.
Analysts said that the euro, which was created in 1999, has been buoyed by a growing belief that the US Federal Reserve would carry on cutting American interest rates to boost the country's flagging economy.
A brace of weak economic releases on Wednesday added to the greenback's woes.
"The weak dollar is driving the market," said BNP Paribas analyst Ian Stannard. "We're seeing the continuation of the effect of yesterday's US data on the housing market."
The US Commerce Department had said housing starts and permits for future construction fell in September to a 14-year low, with a 10.2 percent drop in starts from August.
The American economy, meanwhile, is managing to hold onto its expansion even as the housing sector is pummeled and consumers show signs of fatigue, the Fed had said in its Beige Book report.
"The market reaction is weak data, weak dollar," added Stannard.
The news will likely support Fed chairman Ben Bernanke and Treasury Secretary Henry Paulson's concerns that the US housing market is a threat to gross domestic product (GDP) growth -- and could spark a new US rate cut.
American borrowing costs were cut by a half-point last month to the current level of 4.75 percent.

Copyright AFP (Agence France-Presse), 2007