TOKYO - The dollar lost ground in Asian trade on Thursday as investors continued to buy riskier assets due to mounting hopes for a global economic recovery.

The euro rose to $1.5004 in Tokyo midday trade from $1.4978 in New York late Wednesday, and to 134.76 yen from 134.58. The dollar slipped to 89.82 yen from 89.87.

The greenback's direction "remains firmly downwards as risk appetite continues to improve and the dollar's status as a funding currency remains unaltered," Calyon analyst Mitul Kotecha said.

Investors have been taking advantage of the low level of US interest rates to borrow cheap credit there to invest in higher-yielding assets elsewhere.

The Australian dollar, a beneficiary of this so-called carry trade, struck a fresh 15-month high of 93.54 US cents on expectations that a recovering global economic outlook will boost demand for Australian commodity exports.

Market optimism was supported by surprisingly strong jobs data in Australia, which created 24,500 jobs in October, fuelling speculation the country's central bank may raise rates for a third time by the year's end.

The weak US dollar supported gold prices, which touched a record high of $1,121 an ounce on Thursday in Hong Kong.

A weaker US currency is making the precious metal more affordable to people buying with other currencies and also prompting central banks and investors to diversify their foreign exchange holdings out of the ailing greenback.

The dollar also fell against regional Asian currencies such as the Korean won and the Singapore dollar.

The greenback's weakness has caused concern among Asia's export-led economies, prompting several central banks in the region to intervene to buy the US currency in recent weeks.

"Everyone in the exporting (countries) is facing the consequences of what is really a US dollar story," New Zealand Trade Minister Tim Groser told reporters on the sidelines of talks between Asia-Pacific nations in Singapore.

The APEC forum, which includes the United States and China, is expected to call for flexible foreign exchange rates, according to a draft statement.

South Korea's central bank froze its key interest rate at a record low of 2% for a ninth month, saying uncertainties remained about growth.