NEW YORK (AP) -- The dollar briefly fell to historic levels Monday on news that construction spending took its biggest nosedive in 14 years, extending a string of record lows for the U.S. currency.

The euro purchased as much as $1.5266 in New York trading, topping the previous intraday record of $1.5238 it hit Friday. The euro gave up some gains and was trading at $1.5192 later in the day.

The British pound fell to $1.9847 from $1.9883, while the dollar slid to 103.18 Japanese yen from 103.96 yen, trading near three-year lows.

Japanese Prime Minister Yasuo Fukuda said that sudden foreign exchange moves are not desirable, Kyodo News agency reported.

"I think the situation represents a weak dollar, rather than a strong yen. Either way, too sharp foreign exchange moves are not good," Fukuda said. "We're carefully watching the development."

The Commerce Department reported Monday that construction spending plunged by 1.7 percent in January.

Another report showed fallout from housing and credit problems cutting deeper into manufacturing.

The Institute for Supply Management's manufacturing index clocked in at 48.3 in February. That was the weakest reading in nearly five years. A reading above 50 indicates expansion. Anything below that shows contraction.

Speculation was growing among traders that the U.S. Federal Reserve could cut rates by as much as 75 basis points at this month's meeting, said James Hughes, an analyst at CMC Markets.

Traders were looking ahead to a "flurry of start-of-the-month data" this week for direction, Hughes said.

While the Fed has cut rates in an attempt to loosen the credit squeeze, the ECB has so far been reluctant to do so over worries that it fuel inflation.

"Essentially, what traders will be left looking for are signals to underline that the ECB cannot afford to cut interest rates any further," he said.

In other New York trading, the dollar edged down to 1.0424 Swiss francs from 1.0433 Swiss francs Friday. The Canadian dollar crept above parity with the U.S. dollar, as the American currency rose to 1.0074 Canadian dollars from 0.9832 Canadian dollars.