The dollar fell against the yen and the euro in the last 24 hours, following a 32-month high earlier in the week.

Against the dollar the yen stood at 121.13, while the American currency was at 1.1713 to the euro.

The dollar had reached as high as 121.39 yen on Monday, the strongest it has been since March 2003.

Reports have suggested that the US economy may continue developing without increasing the rate of inflation, causing the dollar to fall.

Tim Mazanec, senior currency strategist at Investors Bank and Trust told Bloomberg: "Higher productivity is helping keep inflation under control and might prevent the Fed from hiking rates.''

According to statistics from the labour department in Washington, productivity rose by 4.7 per cent in the third quarter on last year.

Reduced labour costs in recent months have also lessened fears of inflation.

The expected rise in US interest rates has seen the dollar gain 15 per cent against the euro and 18 per cent against the yen this year.