LONDON, Jan 15: The dollar came under heavy pressure on Tuesday, falling against the euro to near record lows on the view that sharp cuts to US interest rates will be needed to keep the US economy on track, dealers said.

They said that with inflation data looking relatively benign, the US Federal Reserve could feel freer to slash interest rates by 50 basis points rather than the more routine 25 points when it meets at the end of the month.

Some were even ready to bet such a move could come before the Fed meeting or that the US central bank might resort to a radical cut of 75 points as the fallout from the collapse of the US housing market undermines the economy.

In European trading on Tuesday, the euro changed hands at $1.4838 against $1.4866 late Monday, at 158.85 yen (160.83), 0.7546 pounds (0.7598) and 1.6204 Swiss francs (1.6249).

—AFP