The dollar fell to a new all-time low Wednesday in late European trading amid speculation that the Federal Reserve will soon cut interest rates and on a warning from the U.S. treasury secretary that turbulence in financial markets may linger.

The 13-nation euro rose as high as $1.3901 in late afternoon European trading -- topping its previous record of $1.3852, reached on July 24. It almost immediately fell back to $1.3889, compared with the $1.3832 it bought in New York late Tuesday.

The sudden surge came after Treasury Secretary Henry Paulson, speaking to officials from some of the biggest financial firms in the U.S., said that volatility in financial markets will take some time to be resolved, particularly in the area of subprime mortgages.

 Source : Yahoo News