On Wednesday the U.S. dollar fell, as investors moved to riskier assets like stocks and higher-yielding currencies and now it has touched new low levels for 2009 against major currencies.

Hopes for economic recovery has been supported by the rally in European and U.S. stocks, and together with the fall in U.S. dollar borrowing costs, it has encouraged investors to look for higher returns around the world.

Concerns over the dollar’s long-term status has been renewed as the world’s reserve currency and options-related euro buying also contributed to the sell-off, and that has been started on Tuesday.

Boris Schlossberg, who is a director for currency research at GFT Forex in New York has said that the dollar trade is ultimately a risk trade. What it means is that, as risk appetite improves, the dollar gets hurt. Further he said that the lower move has been initiated once a key technical barrier on euro/dollar was lifted late on Friday. Large options contracts expired and this has let the traders to push the euro through $1.45 and $1.46 is the target now. The rise in stocks and commodities are making contribution to the move.

The euro rose 0.6 percent to $1.4571 EUR= in midday trading in New York, after briefly touching $1.46, and that is a fresh 2009 high.

UBS AG analysts has cut forecasts for the dollar, they have said in a note that their one-month euro/dollar forecast has been raised by them to $1.45 from $1.40 and 3-month forecast to $1.35 from $1.30.

The dollar index .DXY fell 0.6% to 76.86. It is the index by which the performance of the greenback versus a basket of six other major currencies is tracked, It has touched 76.810 earlier, and it is its lowest since late September 2008.

As volume picked up with the end of the summer holidays in the U.S, a record number of U.S. dollar index futures contracts traded hands on Tuesday.

The dollar fell 0.7 % to 91.68 yen JPY=,  against the yen, and that is near a seven-month low.

It has been said by the analyst that low interest rates in the United States might be leading some traders to favor the greenback as a funding currency for carry traders instead of the Japanese yen, which in turn has hurt the dollar. In carry trades, by borrowing in lower yielding units investors finance purchases of higher-yielding assets.

On Wednesday, commodities that includes oil and gold, again rose, and this has also helped higher-yielding currencies, such as the Australian and New Zealand dollars, as well as emerging markets assets such as the South African rand.

The Reserve Bank of New Zealand, the Bank of England and the Bank of Canada will hold monetary rate-setting meetings, over the next 24 hours.

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