The dollar fell versus the euro and yen on Friday after troubles in the credit market resurfaced with investors shifting assets to commodities.

The dollar was lower on Friday after American International Group, the world's largest insurer reported a larger than expected loss of $7.8 billion in the first quarter. The company had $9.11 billion writedowns during the quarter, raising concerns bad results in the credit markets are not yet at an end.

U.S. stocks fell. The Standard & Poor's 500 Index fell 0.7 percent. The Dow Jones Industrial Average fell 0.9 percent and the Nasdaq Composite Index was down 0.2 percent.

Meanwhile, investment in commodities rose. Oil set its fifth straight record-setting close at $126.20 a barrel. Gold was up 0.4 percent. Silver gained 0.2 percent.

A day earlier European Central Bank President lowered expectations of interest rate cuts for the euro, keeping its rate steady at 4 percent. ECB chief Jean-Claude Trichet indicated he was focused on growing inflation.

The dollar was at $1.5481 per euro at 4:00 p.m. in New York, down from $1.5398 late Thursday. The U.S. currency traded at 102.95 yen, down from 103.92 yen. The euro was at 159.40, from 160.01 yen.