A stumbling US housing market could cause a further weakening of the dollar as it hit a three-week low against the euro, according to recent reports.

With the dollar trading at $1.3443 against the euro, there has also been speculation that it might yet break the $2 to sterling barrier once again, depending on US federal and British interest rate changes and reinforcing the need to get the best exchange rates.

This has also cut the yield premium for US Treasuries, Bloomberg news agency reported.

Sue Trinh, a foreign exchange specialist with RBC Capital Markets in Sydney, told Bloomberg: "The dollar's yield advantage has waned. The market is vulnerable to weaker housing data and that will weigh on the currency."

Meanwhile, the Wall Street Journal has reported that the dollar could gain against the yen, partially due to the prospect of higher interest rates in Japan.

Last week, the yen weakened significantly against the euro, with 1,000 yen currently trading at 6.010254 euros.