The dollar has fallen against the euro following the release of data which failed to boost hopes of growth within the US economy.

While the euro traded at $1.3625 on falling US house sales and poor consumer sentiment, the dollar also dropped against the yen at 161.50 yen.

"The US data was weak, so it's easy to sell the dollar right now," Takehiko Jimbo, forex manager at Mitsubishi UFJ Trust and Banking, told Reuters.

Meanwhile, the British pound rose to $2.0026 after falling to $1.9993 on Monday.

He added that it was only a matter of time before the euro rose to a record point against the dollar, above $1.3670.

The dollar index fell to a two-year low yesterday at 81.442 but rose to 81.502 earlier today. Anything below 80.390 would mark the lowest level since April 1995.

Standard chartered currency analyst Marios Maratheftis told AFX News that the negative trend in the dollar was likely to reverse from the third quarter.