The dollar and the yen may extend declines against the euro on speculation the Federal Reserve’s second interest-rate cut in two months will keep the global economy from stalling, spurring risky bets.

The dollar sank to an all-time low against the euro and Canadian dollar yesterday after the Fed lowered its target rate for overnight loans between banks by a quarter-percentage point to 4.5%. Stocks, oil, and gold rallied, suggesting an increase in demand for riskier assets.

“The Fed’s rate cut gave a boost to risk appetite,” a manager of $29 billion in currency assets at Putnam Investments, Paresh Upadhyaya, said. “The perception is that the global economy will hold up well and people are buying higher-yielding currencies.”

The dollar traded at $1.4487 per euro and 115.40 yen at 6:01 a.m. in New York. The American currency touched $1.4504 yesterday, the weakest since the European currency’s debut in January 1999. The yen traded at 167.19 per euro after dropping 1.1% yesterday.

The dollar fell against all 16 most-actively traded currencies except the yen last month, losing 1.5% against the euro. The American currency gained 0.6% versus the yen in October.

Economists forecast a report yesterday will show the Fed’s preferred inflation gauge, an index of prices excluding food and energy items, rose at a 1.8% annual rate in September, the same as August, according to the median estimate in a Bloomberg survey. The chairman of the Fed, Ben Bernanke, and several other policy makers have said their “comfort zone” for so-called core inflation is between 1% and 2%. The data is scheduled for release at 8:30 a.m. The biggest gainers yesterday against the dollar among the 16 major currencies were the Australian dollar, South African rand, and Canadian dollar, all of which rose more than 1%.

The three nations’ economies benefit from increased demand for commodities. They are also favored destinations for investors in the carry trade, which involves borrowing funds at low rates in countries such as Japan and buying higher-yielding assets elsewhere.

Australia’s benchmark interest rate is 6.5%, compared with 10.5% in South Africa and 4.5% in Canada. Japan’s benchmark rate is 0.5% while the European Central Bank’s is 4%.

The Australian dollar reached the strongest since 1984, the British pound the highest since 1981 and the Canadian dollar climbed to an all-time high.

“There are so many opportunities in international markets right now,” the vice president of American corporate currency sales at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, Robert Fullem, said. “I don’t think you are seeing many dollar buyers out there. The sentiment is so negative against dollar now.”

The dollar may drop to $1.5 per euro and $2.1 per pound by year-end, according to Mr. Fullem.

American stocks rallied, with the Standard & Poor’s 500 index rising 1.2%. Oil climbed above $94 a barrel while gold exceeded $800 an ounce.