The euro tumbled to a three-week low against the dollar and plunged against the yen Thursday after data painted a dismal picture of the euro zone's economy, increasing the likelihood of European Central Bank monetary policy action.
Output in the 17 countries that share the euro slid by 0.6 percent in the last three months of 2012, more than the 0.4 percent decline expected in a Reuters poll and deepening its recession.
The bloc's two largest economies, France and powerhouse Germany, also shrank by more than expected in the final quarter, casting doubt on forecasts of a recovery in early 2013. The German economy contracted 0.6 percent in the final quarter of 2012, the worst performance since 2009, while France's fell 0.3 percent, which was slightly worse than forecast.
The odds of an ECB rate cut this year grew wider, according to Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, D.C.