NEW YORK (Bloomberg) — The dollar fell against the euro for a fourth week in the longest stretch of losses in almost two years as bigger-than-expected US job cuts spurred speculation that the Federal Reserve will buy more debt.

The US currency dropped yesterday below 82 yen for the first time since 1995 before next week's release of the central bank's September 21 policy meeting minutes. The Australian dollar and franc rallied to records against the greenback as investors sought currency alternatives, with the Aussie approaching parity and the Swiss currency trading higher for a third week.

"There was nothing in the data to eliminate the possibility of QE2 from the Fed," said George Davis, chief technical analyst for foreign-exchange strategy at Royal Bank of Canada in Toronto. "Staying overbought at such an extreme level for the euro indicates how bullish the market really is."

The dollar decreased for a third week against the yen, dropping 1.6 percent to 81.93, from 83.22 on October 1. It touched 81.73 yesterday, the lowest level since April 1995. The dollar fell 1.1 percent to $1.3939 per euro, from $1.3791, in its fourth weekly decline. It touched $1.4029 on October 7, the weakest since January 28. The euro decreased 0.5 percent to 114.19 yen, from 114.78, after touching 115.68, the highest since May 14.

The greenback slid against the euro for five straight weeks through December 26, 2008, after the Fed cut the target lending rate to a range of zero to 0.25 percent.

The seven-day relative strength index of the euro versus the dollar rose yesterday to 80.42, remaining above 70 for a 15th consecutive day in the longest stretch since March 2008. Readings above that level indicate a currency's rally may be difficult to sustain. A sustained drop in the euro below $1.3816 would signal a reversal in dollar weakness, according to Davis.

US employers cut payrolls by 95,000 workers after a revised 57,000 decrease in August, Labor Department figures in Washington showed on Friday.

Fed chairman Ben Bernanke said on October 4 that the central bank's first round of large-scale asset purchases aided the economy and that further quantitative easing is likely to help more. St. Louis Fed President James Bullard said yesterday in an interview on CNBC that the chance of a renewed US recession has receded and there may not be a strong enough case for additional stimulus.

"Fed officials are starting to go back and forth on positions, trying to temper people's expectations, saying don't price it all in," said Brian Kim, a currency strategist at UBS AG in Stamford, Connecticut. "If they do QE, the effect will be muted, so they are trying to control expectations."

The yen ended the week stronger than 82.88 per dollar, where it traded on September 15, when Japan acknowledged intervening in the currency market. Chief Cabinet Secretary Yoshito Sengoku said last month the finance ministry "seems to think" 82 is the line of defense to protect the export-dependent economy.

Finance Minister Yoshihiko Noda of Japan told reporters yesterday in Tokyo before departing for a Group of Seven meeting in Washington that the nation doesn't intend to return to the long-term, large-scale intervention campaigns of the past.