The dollar struck fresh all-time lows against the euro and a basket of major currencies on Tuesday as the market continued with its negative view of the U.S. economy.

Adding to the dollar's woes were worries about more bad news from the financial sector after Citigroup said on Sunday it may write off $11 billion of subprime mortgage losses which led to a downgrade of its credit rating.

Investors have become more comfortable selling the dollar after it failed to benefit from positive U.S. data for October, including news that twice as many jobs were created as expected and that service sector growth accelerated for the first time in four months.

We had quite good data recently in the U.S., with non-farm payrolls and ISM services but we think this is not enough to trigger a lasting recovery in the greenback, said Carole Laulhere, currency strategist at Societe Generale in Paris.

We already know that U.S. GDP in the fourth quarter will mark a slowdown and at the same time Fed officials are warning that the subprime crisis may last a bit longer. So we may post a new highs in euro/dollar ... around $1.47 in coming weeks.

The dollar index, which tracks the greenback's progress against a basket of six major currencies, dipped as far as 76.058, the lowest in its more than 30-year history.

EURO HEADING FOR $1.50?

The euro rose as high as $1.4556, according to Reuters data, its highest level since its 1999 launch and breaching synthetic peaks around $1.4535-45 based on the Deutschmark's all time high around 1.3450 per dollar set in March 1995.

Once this ... (is breached) euro/dollar becomes another market where the dollar has dropped off our charts, technical analysts at Barclays Capital said in a research note.

That is not to say there is no resistance above, projection levels and trendlines will then take over. Near-term resistance beyond lies at $1.4570/80 and is the last barrier of note before $1.4780 and $1.5000.

In contrast to the Federal Reserve, which has slashed the fed funds rate by 75 basis points in the past two months, the European Central Bank has kept a hawkish rhetoric due to concerns about inflationary pressures.

Data on Tuesday showed that annual producer price inflation picked up to its fastest in six months in October, while cost pressures in the service sector surged to a 17-month high.

The ECB is expected to hold rates at 4 percent on Thursday.

The yen, however, slipped broadly as gains in stock markets pointed to a pick-up in risk appetite and encouraged investors to re-enter risky carry trade bets funded by cheap borrowing in the Japanese currency.

The dollar rose 0.2 percent to 114.65 yen, while the euro added half a percent to 166.47 yen.

The Australian dollar rose ahead of the Reserve Bank of Australia's interest rate decision on Wednesday, gaining 0.4 percent against the dollar to $0.9240, near a 23-year peak around $0.9345 hit last week.

The RBA is seen likely to raise interest rates by 25 basis points to an 11-year high of 6.75 percent.