(RTTNews) - The euro fell versus other majors on Thursday in New York after the European Central Bank maintained its key interest rate but offered strong indications that a rate cut may be in the cards by year’s end. On the news, the euro hit its lowest level in more than a year against the dollar and yen and also slipped versus the pound.

ECB President Jean-Claude Trichet softened his hawkish tone Thursday morning in his statement accompanying the ECB’s decision to maintain its 4.25 percent key interest rate. Trichet conceded that upside risks to inflation have diminished.

On Wednesday, reports surfaced indicating that France intends to propose a 300 billion euro banking bailout package at an emergency meeting of Euro area officials on Saturday.

The euro fell as low as 1.3746 against the greenback and reached its lowest level since September 2007. The pair exchanged at 1.3826 in the mid-morning.

Traders reacted after the U.S. Senate passed a sweetened $700 banking bailout package by a comfortable margin. Still, the bill must come before the House of Representatives, leaving investors in a very cautious mood.

The euro fell to a 7 1/2-week low against the British pound, touching 0.7827. In the UK, the Purchasing Managers’ Index for the construction sector declined to 38.8 in September from 40.5 in August, signaling a rapid monthly deterioration in industry activity. The indicator stood slightly below the expected reading of 38.9 in September.

Against the yen, the European currency hit its lowest level in more than two years, reaching 145.15. The Bank of Japan said the monetary base climbed 0.9% on year in September, standing at 88.37 trillion yen.

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Posted in Categories: Eurozone, Forex, Japan, Releases, UK, USA.

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