Investors are rewriting playbooks on how to trade major currencies as the dollar's rampage pummels peers to fresh lows.

With the greenback supercharged by expectations of higher-for-longer U.S. interest rates, traders are struggling to pick the bottom for both European and Asian currencies.

In the last 24 hours, the pound slid to the weakest level since 1985 and the yen fell to within a whisker of 145 per dollar. Meanwhile the euro is just about hanging onto parity with the greenback ahead of the European Central Bank's interest-rate decision.

"It's difficult to call a turning point and the default is to not fight dollar strength," said Viraj Patel, a strategist at Vanda Research in London. While there's opportunity to start buying beaten-down peers like the yen, "the path of least resistance is that these hawkish Fed trades — dollar strength being one of them — continues until something stops it."

In Asia, China's yuan is teetering on the edge of the key 7 level. The risk-sensitive Korean won is hurtling toward the closely watched 1400 mark, with jawboning from officials on Wednesday having little impact.

Here's a snapshot of what's next for some of the world's most-traded currencies:

Euro Challenge

Strategists warn that not even a jumbo 75 basis-point rate hike from the ECB on Thursday will be enough to sustainably support the common currency. It fell as low as $0.9864 earlier this week, the weakest level since 2002.

ECB chief Christine Lagarde and her colleagues are grappling with the twin problems of high inflation and an impending recession.

"Given the economic outlook, it's not clear to me that higher rates will do much to support the euro," said Kit Juckes, head of currency strategy at Societe Generale SA.

Pound Hit

The pound slid as much as 1% in Wednesday trading to $1.1406, the lowest level since 1985, when new Prime Minister Liz Truss' role model Margaret Thatcher was midway through her 11-year stint in power. It's still trading around $1.15 on Thursday, having slid about 15% against the greenback this year.

While much of that performance can be attributed to demand for dollars, it also reflects the dismal economic outlook in the U.K.

Truss has taken office with double-digit inflation and warnings of a deep recession. Bank of America Corp. strategists have warned that increasing strains on government finances are one of the key long-term headwinds for the currency.

Yen Slide

For the battered yen, now on track for its worst year on record, investors are mulling the strongest warnings to date from senior Japanese government officials aimed at stemming its slide. The dollar-yen touched 144.99 Wednesday before pulling back, making 145 a key focal point for chart watchers.

Traders old enough to remember are keeping an eye on 146.78, the level reached before a joint Japan-U.S. intervention to support the currency in 1998. The U.S. Treasury Department on Wednesday stuck by its reluctance to support any potential intervention in currency markets.

The yen threatened to snap a three-day losing streak on Thursday after senior Japanese officials agreed to meet for the first time since June to discuss markets. The currency held its ground at about 143.60 in London trading.

Yuan at 7

China's currency is sliding away from the six handle, even after Beijing sent its most powerful signal yet on its discomfort with the yuan's depreciation.

Under pressure from continued COVID-induced lockdowns and the embattled property sector, investors are selling the yuan as they see little revival in growth and as interest rates in the U.S. rise at the fastest clip in a generation. Goldman Sachs Group Inc., UBS Group AG and Bank of America Corp. are all forecasting the yuan will weaken to 7 as China's economic slowdown bites.

Standard Chartered Plc doesn't expect authorities to directly intervene in markets to strengthen the yuan, though they may "step-up" on other measures including boosting issuance sizes of offshore PBOC bills in an attempt to bolster the currency, said Becky Liu, head of China macro strategy.

Risky Won

South Korea's currency, seen as a bellwether for risk-sentiment in Asia, is fast approaching the psychological 1400 level versus the dollar last seen in 2009.

Its precipitous fall prompted the central bank to warn against the pace of the currency's decline following its slump to a 13-year low on Wednesday. Yet that's done little to ease traders' bearishness. Dollar-won traded around the 1380 level Thursday.

Expect more jawboning from authorities, according to TD Securities. "We may expect more FX intervention in the days ahead as the authorities are unlikely willing to see dollar-won break above the 1400 level ahead of the Chuseok holidays," TD strategists wrote in a note.

Ruth Carson reports for Bloomberg News.

Copyright 2022 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.