LONDON, Feb 22: The dollar continued weaker on Friday after a series of poor US data reinforced expectations that the US Federal Reserve will have to cut interest rates sharply again in March to keep the economy on track.

Dealers said the dollar came under even further pressure on news of a stronger-than-expected survey on European business, suggesting the eurozone is proving resilient to both a US slowdown and the global credit crunch.

“The dollar remains on the defensive ... Reinforcing the dollar decline was a stronger than expected report on eurozone services, which reduced the likelihood of a (eurozone) rate cut,” said Ashraf Laidi at CMC Markets.

In late European trade, the euro rose to $1.4821, from $1.4811 in New York late on Thursday.

The dollar also weakened to 107.01 yen from 107.37.

Dealers said the deteriorating outlook for the US economy has increasing the odds the Fed will cut interest rates sharply again in March, most likely by half a percentage point after a reduction of 1.25 percentage points in January.

“Market sentiment is that there is a very good chance of another rate cut coming up,” said Mic Mills at TradIndex.com.

Market players put the likelihood of a half point rate cut at 80 per cent, piling the pressure on the dollar as other currencies offer better returns.—AFP