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Euro hits two-month high
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December 4, 2000: 7:24 a.m. ET
U.S. economy expected to slow, forcing Fed to ease interest rates
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LONDON (CNNfn) - The euro rose sharply Monday to reach a two-month high against the dollar, amid expectations the pace of U.S. economic growth will slow over the coming months.
Europe's beleaguered single currency jumped to 89.05 U.S. cents from 87.92 cents in late New York trade on Friday. The dollar fell to its lowest level since the Group of Seven industrial nations intervened in support of the euro on Sept. 22.
 "The general consensus is that the U.S. economy is in for a protracted slowdown," Malcolm Barr, a European economist at Chase Manhattan, told CNNfn.com.
Steve Barrow, a currency analyst at Bear Stearns, said the euro could rise to 90 cents on the back of weak economic data from the U.S., but was still in a "downward trend".
All eyes are on "the next round of figures from the U.S. which will be payroll on Friday - we can expect more weakness," Barrow said. "The U.S. Federal Reserve is expected to ease interest rates early next year" to keep the economy on track for growth without accelerating inflation, he said.
But economists cautioned that the euro had not turned the corner yet.
"The euro has to break through the 91 cents to 92 cents range before we can look to a recovery of sorts," said Kirit Shah, Chief Market Strategist at Sanwa International.
The latest signs that the U.S. economy is slowing emerged Friday, when data from the National Association of Purchasing Management showed that the manufacturing sector contracted in November for the fourth straight month. 
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