Tuesday saw the dollar fall to a record low against the euro on the back of poor economic data from the US.

The National Association of Realtors lowered its forecast for home sales, prompting concerns among traders.

London trading saw the dollar fall to 1.3860 per euro, falling below a previous record low of 1.3852 which was set in January, according to Bloomberg.

Currency manager Masashi Kurabe told the news agency that the Federal Reserve "should cut rates by a half-percentage point as the economy's outlook has worsened".

"European rates may go up as soon as the markets stabilize," he added, explaining that "a narrowing interest-rate differential is positive for the euro".

The euro's rise in fortunes has benefited the yen, which had slumped on the back of rumours that Japanese prime minister Shinzo Abe is to resign.

Traders returned to the yen after the euro made record gains against the dollar.