The euro fell to a 20-month low against the dollar on speculation
the European Central Bank will cut interest rates to bolster growth as
the global economy heads for recession.
The single European
currency also slid to the weakest in four years versus the yen as Asian
stocks declined, reducing demand for higher-yielding assets funded by
loans in Japan. The British pound tumbled to a five-year low after Bank
of England GovernorMervyn King said the country is likely in a
recession. The Australian and New Zealand dollars dropped after prices
of commodities the two countries export declined.
``It's easy to sell the euro,'' said Hiroshi Yoshida, a foreign-exchange trader in Tokyo at Shinkin
Central Bank, Japan's fifth-largest publicly traded lender by assets.
``The ECB has a lot of scope to lower rates. Market sentiment isn't in
theeuro's favor.''
EUR/USD from $1.3050, euro fell to
$1.2740 before bounsed back to $1.2880.