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According to Bloomberg, the single currency plummeted from a two-and-a-half month high versus the greenback after Ireland's credit rating was cut by Standard & Poor's (S&P).
But the downgrade did not come as a big surprise to Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ, who added: "It has brought sovereign debt concerns back to the market's attention and taken some of the upward momentum out of the euro."
S&P pointed out its decision reflected its "view of uncertainties" regarding the size of Ireland's capital needs.
The single currency was down to $1.3805 against its US counterpart this morning, although at one stage it had been at $1.3862.
And this comes after the euro decreased by 0.5 per cent against the pound this morning to a session low of 85.25 pence.
Posted by Greg Secker
