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Euro hits a three-month low

04 March 2009 16:18 (UTC +04:00)

Bakuâ€“ APA-Economics. The euro hit a three-month low against the dollar on Wednesday as investors fled risky currencies after a sharp contraction in the Australian economy, dealers said.
The European single currency struck 1.2457 dollars in Asian trade. Later in London deals, the euro recovered to 1.2517 dollars, but still under its level of 1.2556 dollars reached late Tuesday in New York, AFP reported.
Against the Japanese currency in London trade, the dollar rose to 99.21 yen from 98.15 yen on Tuesday.
The euro was under pressure ahead of Thursday’s meeting by the European Central Bank, which is widely expected to slash its key lending rate by 50 basis points to 1.5 percent.
The Bank of England is also expected to slash its key interest rate on Thursday by half a percentage point to just 0.5 percent -- the lowest level in the bank’s 315-year history, analysts said.
Analysts said the BoE’s nine-member monetary policy committee (MPC) may also announce plans for so-called quantitative easing -- a last-ditch effort to increase money supply -- as it becomes clear that lowering rates has failed to stimulate the economy sufficiently.
Dealers added that the dollar was winning support from the view that Washington is taking swifter action to tackle the economic crisis compared with the eurozone and Japanese authorities.