Euro Falls to Two-Week Low Against Dollar

The euro fell to the lowest in two weeks against the dollar after ECB officials said economic growth is slowing, prompting speculation the bank may follow the Federal Reserve in cutting interest rates., Bloomberg 1/17/2008 6:46:54 AM

The euro declined against 12 of the 16 most-active currencies tracked by Bloomberg before Fed Chairman Ben S. Bernanke testifies to Congress on the U.S. economy. ECB policy maker Yves Mersch said there are ``downside risks'' to Europe's expansion, while fellow council member Axel Weber said officials shouldn't ``over-dramatize'' the pickup in inflation.

Europe's common currency fell as much as 0.4 percent to $1.4589, the lowest since Jan. 2, and was trading at $1.4641 as of 11:26 a.m. in London, from $1.4652 yesterday in New York.

The euro-region currency declined for a third day against the yen, dropping to 156.87 from 157.72. It also fell for a third day against the British pound and was at 74.30 pence, from 74.63 yesterday.

The yen extended gains as Eisuke Sakakibara, a former top currency official at the Ministry of Finance, said the Bank of Japan is unlikely to sell yen even if the currency rises to near 102 per dollar. The government would have to obtain agreement from the U.S. to intervene in foreign-exchange markets, Dow Jones cited him as saying.

The euro approached a record high versus the dollar two days ago as traders bet the ECB would keep its benchmark rate unchanged or even lift borrowing costs to control inflation.

Euro Falls to Two-Week Low Against Dollar