The euro rocketed to a two-month high of $1.29 and sterling jumped two cents to almost $1.54 after the Fed confessed that the US economy may not recover for five or six years.
Far from winding down emergency stimulus, the bank may need a fresh blast of bond purchases or quantitative easing, the Telegraph reports.
Usually the dollar serves as a safe haven whenever the world takes fright. Not this time. The US itself has become the problem.
"The worm is turning," said David Bloom, currency chief at HSBC. "We're in a world of rotating sovereign crises. The market seems to become obsessed with one idea at a time, then violently swings towards another. People thought the euro would break-up. Now we're moving into a new phase because we're hearing alarm bells of a US double dip."
Mr Bloom said a deep change is under way in investor psychology as funds and central banks respond to the blizzard of shocking US data and again focus on the fragility of an economy where public debt is surging towards 100pc of GDP, not helped by the malaise enveloping the Obama White House. "The Europeans have aired their dirty debt in public and taken some measures to address it, whilst the US has not," he said. FULL STORY
The average well-educated couple lost more than £35,000 during the recession, the Daily Mail reports.
Research from Britain's leading independent economic experts reveals the crippling financial impact of the downturn.
It is the first time anybody has managed to put a price on the recession, working out how much money it wiped off homes, savings and pensions.
The report from the Institute for Fiscal Studies revealed that everybody paid a heavy price, with the average person losing £11,300 - equal to £22,600 for a couple. FULL STORY
Despite improved risk appetite
FOS award limit increase
Relates to 136 million transaction reports
Ceremony will take place 13 November