Dollar tumbles to record lows as Fed looms

"There is no compelling reason to buy the U.S. dollar," said Firas Askari, head currency trader at BMO Capital markets in Toronto.

The Aussie climbed as high as US$0.9171, while the New Zealand dollar scaled a session high of US$0.7674.

The Canadian dollar hit a fresh 33-year high against the greenback. The dollar was last trading 0.4 percent lower at C$0.9630.

The rise in high-yielding commodity currencies, coupled with gains in 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 was little changed against the yen at 114.13 yen, while the euro gained 0.4 percent to 164.25 yen. Sterling hit a three-month high versus the dollar at 2.0574, but fell against the euro as investors bet Britain would be next to start cutting rates.