LONDON, Oct 24: The euro fell to a two-year low under $1.25 on Friday and the British pound sank to a six-year trough against the US unit as evidence mounted of slowing economic growth in Europe.

In morning trade, the European single currency dived as low as $1.2497, last seen in October 2006, on expectations of eurozone interest rate cuts and slow economic growth amid the global financial crisis.

It later stood at $1.2683, down from $1.2926 late in New York on Thursday. The euro also hit a six-year low of 113.81 yen before rebounding to 119.04.

The pound sank to $1.5269, which was the lowest point since August 2002, after official data showed the country’s economy contracted by 0.5 per cent in the third quarter.

“There’s still no sign of any let up in the dollar’s recent surge, especially in Europe where speculation that further rate cuts will be seen from central banks before the year end is continuing to weigh on the likes of the pound and euro,” said analyst Gary Thomson at CMC Markets.

Dealers said there were few factors to support the euro amid rising fears of recession in Europe and expectations that the European Central Bank will cut interest rates.

On the downside, the dollar tumbled to a 13-year low against the yen as investors sought refuge amid rising fears of a global recession, dealers said.

The US currency sank to 92.80 yen, the lowest level since August 1995. It later pulled back slightly and stood at 93.80 yen in European trade, from 97.79 yen late in New York on Thursday.—AFP