Dollar falls to three-month low against euro

The US dollar has fallen to a three-month low against the euro, amid fears that talk of an American economic recovery has been overplayed.

The dollar dropped to $1.18 in London morning trading - within sight of the all-time low of $1.19 - before rebounding somewhat to $1.17.

Encouraging unemployment figures from the US Department of Labor last week proved short-lived.

Comments attributed to outgoing European Central Bank Governor Wim Duisenberg that a fall in the dollar rate was "inevitable" also led to increased selling by currency speculators.