Euro drops to 3-month low in Asia

The euro fell to a more than three-month low against the dollar in Asia Wednesday as investors fled risky currencies after a sharp contraction in the Australian economy, dealers said.
The euro slipped to as low as 1.2457 dollars, the weakest since November 21. In late Tokyo trade it was at 1.2492, down from 1.2556 in New York Tuesday.
The dollar climbed to 98.44 yen from 98.15. The euro slipped to 122.98 yen from 123.32.
"The dollar continued to advance across the board as it was seen as better than other currencies given the terrible economic situation everywhere," said Marito Ueda, forex dealer at FX Prime.
Australia's economy unexpectedly shrank 0.5 percent in the fourth quarter of 2008, putting the country on the brink of recession.
The news weakened the Australian dollar, "which in turn brought down the euro" and other risk-sensitive currencies, Akio Shimizu, chief forex manager at Mitsubishi UFJ Trust and Banking, told Dow Jones Newswires.
The Australian dollar dropped to 0.6287 US dollars from 0.6387.
The yen fell against the greenback as Japan's opposition leader Ichiro Ozawa, seen as a potential future prime minister, dismissed calls to resign after a close aide was arrested in a fund raising scandal.