The dollar come under aggressive selling pressure against the yen, falling to its lowest level since 2000 at 101.38 as heightened risk aversion prompted a sharp rally by the Japanese currency. Persistent fears of instability in the US financial markets and burgeoning concerns about an economic recession have plagued the greenback. However, the currency’s rapid descent has prompted a renewed bout of verbal intervention in an effort to contain further deterioration.

With the euro maintaining its strength near record levels against the dollar, Eurozone officials have stepped up their rhetoric to temper additional appreciation. ECB President Trichet said he was concerned by excessive moves in foreign exchange, adding that excessive volatility and disorderly fx moves are undesirable. He also said that he notes with extreme attention US statement that strong dollar policy is in US interest. Nonetheless, given the barrage of criticism over China’s currency regime and accusations of currency manipulation, Trichet’s comments are viewed as little more than jawboning rather than a signal of coordinated intervention.