The greenback has become notorious for its decline against the euro and the yen, but its slide became more nuanced on Monday, following emergency action from the United States Federal Reserve to contain the fall-out from the Bear Stearns bailout.

The dollar hit a fresh record low against the euro Monday morning, with the single European currency breaking past the $1.59 barrier during morning trading. By midday in London, the euro had scaled back its rise to $1.58, still one penny above Friday's closing price of $1.57.

It was a similar story for the dollar-yen, with the dollar plunging 2.1% against the Japanese currency. The dollar is currently worth 96.45 yen, down from Friday's close of 98.51 yen.

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Much of Monday's volatile trading hinged on the actions of the U.S. Federal Reserve over the weekend. The central bank slashed the discount rate to 3.25%, down from 3.5%, and rubber-stamped JPMorgan Chase (nyse: JPM - news - people )'s $236.2 million acquisition of collapsing brokerage Bear Stearns (nyse: BSC - news - people ). (See "Bear Throws In The Towel")

With interest-rate differentials against other currencies set to widen on Tuesday, when the Fed is expected to cut rates further to help revive the American economy, the dollar is not looking like a good, high-yield investment.

But the dollar actually firmed against some European currencies on Monday, including the pound sterling. The pound fell against most major currencies on Monday after the Bank of England announced a three-day, £5 billion ($10.0 billion) auction to temper volatile conditions in the inter-bank lending market.

The greenback rose 0.7% against the British currency, to 49.9 pence. It also gained 0.4% relative to the Norwegian kroner, up to 5.11 kroner, and was up 2.7%, against the South Korean won. It also firmed up against the Canadian dollar and the Indian Rupee.

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