Calm before the storm
Overnight the dollar hovered around the same mark, with investors and analysts pausing amid the calm before the storm.
The dollar was worth 1.2225 to the euro this morning, with sterling operating at $1.8024.
Anticipation of Hurricane Rita - now at the highest possible strength of Category 5 with winds up to 165 mph - is building in the US, with three-quarters of oil refineries in the Gulf Coast now evacuated ahead of the impact.
With the effects of Hurricane Katrina still being felt, trading on the dollar has been tentative, but some analysts believe the threat has already been accounted for.
"Given that the dollar already lost about 0.8 per cent against the euro yesterday, most of the bad news may already be in the price and the news flow on Rita may have to get increasingly threatening for the dollar to weaken further," CALYON analyst Kristjan Kasikov told AFX.
However, the prospects for an increase in the storm's velocity and also clearer details on its trajectory, means any firm conclusions are difficult to make.
Elsewhere the pound fell this morning after the Confederation of British Industry showed figures indicating a continuing slump in the manufacturing sector, with orders standing at a register of -27 - an improvement on August below expectations.
Analysts will now be watching to determine whether the manufacturing sector will continue to fall, with the wider picture of the UK economy's prospects still unclear.