The euro dropped to the lowest in the last 20 days against the US dollar and fell against the British pound as well, on speculations that the European Central Bank will cut its interest rates by more than 25 basis points due to the slowing inflation. Europe’s inflation rate slowed to 1.6 percent in the last month of 2008, the lowest level in two years, in line with decline in the price of oil and decreased consumer spending. The greenback remained stable after  policy makers forecast further shrinking economy in the first half of 2009 after the Federal Reserve’s meeting. The British currency gained versus the yen and the Swiss franc as well, supported by the climb of the FTSE 100 Index of the UK shares which booked gains for the sixth day in a row.