The dollar has fallen to a record low against the euro and a five-year low against the yen on reports that China, the second-largest holder of US debt, had trimmed the amount of US treasury bonds in its portfolio.

The China Business News quotes Yu Yongding, a member of the central bank's monetary policy advisory committee, as saying Beijing has cut the proportion of foreign exchange reserves held in dollars.

Professor Yu is quoted as "revealing" that the rate of increase of holdings of US government bonds had fallen and total holdings were currently around US$180bn.

Financial markets reacted to the report. The euro strengthened to a record $1.3330 against the dollar and was trading at $1.3299 in morning trading in London, from $1.3269 in New York on Thursday.

The greenback also weakened against the Japanese currency to Y102.38.

Statistics from the US Treasury Department show Chinese mainland holdings of treasury securities totalled US$174.7bn at the end of September, up from US$172.3bn at the end of August.

Meanwhile, China's foreign exchange reserves rose from US$496.2bn US dollars to US$514.5bn, suggesting a fall in the proportion of reserves held in treasury bonds.