The US dollar fell sharply on Tuesday, hitting a 10-week low against the euro, in spite of the absence of any overwhelming catalyst for the sell-off. The euro hit a record high against the yen.

Two major explanations were advanced for the dollar’s initial slide. One was a return of fears that Asian and Middle Eastern central banks may be about to diversify their reserves out of the dollar, re-opening the debate over the funding of the vast US current account deficit.