NEW YORK (Reuters) - The dollar fell to fresh record lows against the euro and a basket of currencies on Friday as investors, faced with a run of weak U.S. economic data, anticipated a Federal Reserve interest rate cut next week.
U.S. crude oil's rise to record highs above $92 a barrel and gold's climb to 28-year peaks also hurt the dollar, boosting the currencies of commodity-rich countries such as the Australian dollar which hit a 23-year high against the greenback.
The Aussie was also helped by expectations that the Reserve Bank of Australia will raise rates next month. In contrast, weak U.S. durables goods data on Thursday reinforced bets for a growth-boosting Fed cut on October 31 from 4.75 percent.
"Oil prices continued to surge higher and combined with weaker U.S. data, the dollar is facing significant headwinds once again," said Sophia Hardy, UBS currency strategist. "Our economists once again look for a 25 basis point Fed cut next week."
The euro had risen as high as $1.4388, the highest since its 1999 launch, according to Reuters data. Early morning in New York, it had trimmed gains slightly to trade at $1.4376, up 0.4 percent.
Eurogroup Chairman Jean-Claude Juncker said in a newspaper interview published on Friday that he preferred a strong euro to a weak one, adding that the European currency was not yet at alarm-causing levels.
Euro zone money supply annual growth for September came in at 11.3 percent, a slightly slower rate of growth than for August but still well over the ECB's 4.5 percent target.
Analysts said this would add to the European Central Bank's dilemma over the next move for euro zone interest rates.
"There is bound to be a big split in ECB ranks now. (The M3 data) will add to hawks' campaign for higher rates but the hawks should be looking to weaker growth momentum as the more important driving force for next year," said Bear Stearns in a client note.
The dollar index -- which tracks its progress against six major currencies -- fell to 77.035, the lowest since its post-Bretton Woods inception over 30 years ago.
The Aussie climbed as high as US$0.9149, while the New Zealand dollar was up 0.6 percent at US$0.7657.
The rise in high-yielding commodity currencies, coupled with gains in Asian equity markets, helped boost risk appetite and encourage investors to put on carry trade bets funded by cheap borrowing in the Japanese yen.
The dollar rose 0.1 percent against the yen to 114.33 yen while the euro gained 0.5 percent to 164.33 yen.
Firmer U.S. stock futures on the back of Countrywide Financial Corp., the largest U.S. mortgage lender, saying it expects to return to profitability this quarter even as it posted a $1.2 billion third-quarter loss, also helped keep risk appetite elevated, said Omer Esiner, foreign exchange analyst at Ruesch International in Washington.
Friday's calendar features the final reading from the October Reuters/University of Michigan U.S. consumer sentiment survey at 10 a.m. (1400 GMT) and a speech by Fed Governor Frederic Mishkin on financial instability and the Fed's role in providing liquidity at 2015 GMT.
