NEW YORK, March 15: The dollar skidded below 100 yen and marked fresh lows against the euro Friday as more US economic woes roiled the markets after news of an emergency loan to prop up Wall Street firm Bear Stearns.

The US currency also slid below parity with the Swiss franc for the first time ever as a tame inflation report boosted the odds for a hefty rate cut by the Federal Reserve. The euro was at 1.5669 dollars, up from $1.5624 in New York Thursday but off the record 1.5688 hit earlier Friday.

The dollar was at 99.18 yen, down from 100.60 yen to test 12-year lows, and 0.9978 Swiss francs compared with 1.0102.

The pound was at $2.0219 after 2.0317.

News of a near-collapse at white-shoe Wall Street firm Bear Stearns sent reverberations throughout all markets worldwide, not only because this is another ‘too big to fail’ scenario, but also because it has strong implications for a domino effect in the already weakened financial services industry and beyond, said Sherry Cooper, chief economist at BMO Capital Markets

The latest round of turmoil prompted European Union leaders on Friday to call on the banks to help stabilize nerve-wracked financial markets as they also sounded the alarm about the euro’s record-breaking gains.

We would like to invite financial institutions to help reduce the instability on financial markets within their limits, Slovenian Prime Minister Janez Jansa told reporters after chairing a summit of EU leaders.

EU leaders said that sharp swings in exchange rates “are undesirable for economic growth and that in the present circumstances we are concerned about the excessive exchange rate move. Dealers noted that in late trade the dollar steadied slightly amid speculation that central banks might be considering intervention.

The weakness of the dollar and its record-breaking lows may result in the first coordinated attempt in 13 years to strengthen the currency, said Jordan Eburne at PNC Bank.

The dollar making new lows against the euro and 12-year lows against the yen has brought about complaints from ECB President (Jean-Claude) Trichet and Japanese Finance Minister Fukushiro Nukaga. The Group of Seven nations may feel the need to step in, just as they last did in 1995 when the dollar was trading at similar levels against the yen.

The analyst added that the weakness of the dollar is already beginning to affect other markets, like the commodity markets, as investors lose confidence in US assets.

However, an intervention isn’t likely imminent just yet as the weak dollar is helping support America’s economy via an increase in exports, and the strong euro has been needed to help contain inflation in Europe.—AFP