Euro slips against U.S. dollar - 28 February, 2007

The euro was weaker against the U.S. dollar Wednesday as fears of a worldwide slump in markets weighed on the common currency.

Photo: Euro slips against U.S. dollar

In morning trading, the 13-nation euro bought US$1.3188, compared with the US$1.3243 it bought in New York late Tuesday, after China's stock market plunged from record highs amid concerns that the government could raise interest rates or reduce money available for lending in an effort to slow its booming economy.

The Shanghai Composite Index rose 3.9 percent Wednesday to close at 2,881.07, rebounding from its 8.8 percent plunge Tuesday its biggest drop in a decade.

While several Asian markets trimmed big early losses by afternoon, nervous investors were still wary of whether the slump signaled the beginning of a downward spiral or just a one-time jolt to cool overheating markets, reports AP.

In Europe, Britain's benchmark FTSE 100 Index was down 1 percent to 6,224.40 in morning trading, as the British pound fell to US$1.9552 from US$1.9632 the day before.

The dollar rose to 118.58 Japanese yen from 118.22 yen.