The dollar index, which measures the greenback against a basket of six major rivals, touched its lowest since early September of 94.63. The dollar touched 0.9548 franc , its lowest against the Swiss currency since late June 2016, while the dollar hit a three-week low against the Japanese yen of 112.01 yen.
The dollar index has fallen 7.5 percent since the start of the year, partly on the doubts over Trump's fiscal stimulus agenda, with much of the downdraft starting in early March. The Australian dollar was a beneficiary of the greenback's weakness on Tuesday and surged to a more than two-year high of $0.7917.
"This is a tremendous short squeeze in the euro on the break of $1.15, and that has resulted in a significant rally as shorts bail out of their positions," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York.
Friday's weak reading on U.S. inflation and retail sales fanned speculation the Fed may not have justification for another rate hike by the end of this year, despite policymakers' projection for such a move.