Euro Falls


The euro fell against the dollar, yen and pound after European Central Bank President Jean-Claude Trichet said the economy ``weakened significantly'' and the International Monetary Fund cut growth forecasts for the region.

The 15-nation currency dropped the most in almost two weeks versus the dollar as the ECB reduced its main refinancing rate by a half-percentage point to 3.25 percent and Trichet said more reductions may follow. The Bank of England unexpectedly lowered its key rate by 1.5 percentage point to 3 percent, and Switzerland cut its target to 2 percent.

The euro declined 1.7 percent to $1.2740 at 2:39 p.m. in New York, from $1.2954 yesterday, having weakened 20 percent since climbing to a record $1.6038 on July 15. The euro may end the year at $1.25, Shankar said. It depreciated 2.1 percent to 124.29 yen and 0.9 percent to 80.77 British pence. The dollar dropped 0.3 percent to 97.65 yen.

The yen and the dollar in October posted their largest monthly gains versus the euro since the 15-nation currency's debut in 1999 as signs of a global recession led investors to seek safety in the Japanese and U.S. currencies.


TradingEconomics.com, Bloomberg.com
11/6/2008 12:28:12 PM