London: The euro fell below $1.45 dollars level for the first time since 12 February as the market anticipated lower interest rates in the euro zone.

In early London trade, the euro was at $1.4499, down from $1.4582 in Asian deals and from $1.4606 here late Monday.

Dealers said the market was betting that the European Central Bank will have to consider a cut in interest rates sooner rather than later as the 15-nation eurozone economy slows further after contracting 0.2% in the three months to June.

“The dollar could post further gains as other central banks acknowledge the worsening economy,” Chuo Mitsui Trust Bank strategist Yosuke Hosokawa said in Tokyo.

“Markets are focused on the weakness of economies other than the US. There is a widespread view that currencies will further weaken against the dollar,” Hosokawa said.

The Bank of England and the European Central Bank are both expected to leave their key lending rates on hold on Thursday but there is growing speculation they will be forced to cut rates before long.

The Australian central bank expected to cut its benchmark rate by a quarter point to 7.0% today for the first time since 2002.

Reserve Bank of Australia governor Glenn Stevens said the decision had been taken because financial conditions had become quite tight.

“Conditions in international financial markets remain difficult, with heightened concerns over credit persisting,” Stevens said.