Euro slumps on US recovery hopes

EUROPE'S single currency plunged to its lowest in six months against the dollar, hit by renewed optimism about the US economy. The euro slumped by a cent to 86.6 cents in a delayed reaction to Thursday's upbeat assessment by US Federal Reserve chief Alan Greenspan.

He told the Senate Budget Committee that the forces restraining the US economy over the past year were starting to diminish and growth was beginning to pick up.

Against sterling, the European currency was almost half a penny weaker at 61.25p. Kamal Sharma, currency analyst at Commerzbank, predicted it has further to fall.