The euro saw weakness against other majors as more discouraging economic reports fueled speculation of forthcoming interest rate cuts by the European Central Bank. The currency hit near-term lows against the dollar, sterling, yen and franc.
The euro plunged nearly 3 cents off its overnight highs versus the dollar and moved at 1.2672 in the late morning, falling to a four-day low. Last month, the euro reached a two-year low of 1.2328 versus its U.S. rival.
The European currency dropped to a 16-day low of 0.8249 versus the British pound. The drop took the euro further away from the record 0.8662 reached earlier this month.
The euro fell to a four-day low of 120.54 versus the Japanese yen. The drop took the currency below near-term support. The euro fell to 1.5433 against the Swiss franc.
A flash estimate released by the Eurostat on Friday said annual inflation in 15 nation economy eased to 2.1% in November from 3.2% in October. Inflation slowed more than the expected rate of 2.4%. The final data for November is scheduled to be released on December 17.
Separate data showed the jobless rate rose to 7.7% in October from September's upwardly revised 7.6%. Economists were expecting a rate of 7.6% for October.
French President President Nicolas Sarkozy confirmed Friday that he will detail a Eur 19 billion stimulus package for key industries next Thursday. The stimulus package, which would be equivalent to 1% of the country's gross domestic product, is the latest in a string of efforts aimed at reviving the slumping French economy.
Meanwhile, the statistical office INSEE showed that French domestic industrial producer prices declined 0.9% month-on-month in October after falling 0.7% in September and 0.2% in August. Economists had predicted a 0.4% decline for October. In August, producer prices had recorded its first monthly decline since December 2006.
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