By Kanako Chiba and Mari Murayama
The euro fell after European Central Bank Vice President Christian Noyer signaled the bank doesn't see the need for additional rate cuts, fueling concern economic growth may slow in the 12-nation region.
``We think the present level, for the time being, is appropriate to provide the best conditions possible,'' Noyer said at a speech to the European Union Chamber of Commerce in Seoul. The comment damped speculation the ECB may lower rates for a fifth time in 2001 and reverse a decline that has sent the euro down 6.5 percent against the dollar during the period.
``Noyer's comment disappointed the market, as the consensus is Europe needs additional rate cuts,'' said Kosuke Hanao, head of forex sales at the Royal Bank of Scotland.
The euro fell to 88.16 U.S. cents from 88.43 in late New York trading Friday. Against the yen, it dropped to 108.49 from 108.72, snapping a three-day gain.
The European currency may fall further as a Bundesbank's report later today may signal German economic growth stalled in the third quarter. The average estimate of 22 economists surveyed by Bloomberg News was for no growth in the period, with seven seeing a contraction.
The ECB'S four rate cuts this year brought its target for overnight bank lending to 3.25 percent. That compares with the Federal Reserve's 10 reductions, bringing its target for U.S. overnight rates down to 2 percent, the lowest level in 40 years.

More Money
European Central Bank council member Ernst Welteke said yesterday interest rates in the dozen countries that share the euro are ``appropriate'' and cautioned too many reductions may fuel inflation, suggesting the central bank is done paring borrowing costs and the euro is headed lower for now.
``When an economy is given more and more money, more than it needs, then you end up with inflation,'' he told journalists in Ottawa, where finance ministers and central bank chiefs of the Group of 20 nations gathered for talks this weekend.
The International Monetary Fund yesterday slashed next year's growth forecast for Germany, which accounts for 30 percent of the economy of the dozen nations that share the euro, by 1 percentage point to 0.8 percent. The German government expects a 1.25 percent expansion in 2002.
Many investors say the U.S. economy will rebound before Japan's or Europe's, boosted by the tax cuts and Federal Reserve interest-rate reductions, traders said.

U.S. vs Europe
``Compared to the U.S., where the tax cuts and rate reductions have been helping the economy, the outlook for Europe is pessimistic,'' said Hiroshi Sakuma, a foreign exchange manager at Barclays Bank Plc.
The dollar may rise against the yen later in the session on optimism the war in Afghanistan is nearing an end, reducing the chance of further terrorist strikes and spurring investor confidence in the U.S.
Suspected terrorist Osama bin Laden is still probably hiding in Afghanistan and U.S. forces and their allies are closing in on him, Secretary of State Colin Powell said. The U.S. military effort is focused on dismantling his al-Qaeda network, which is suspected in the Sept. 11 attacks that weakened the U.S. economy.
``The stabling war situation in Afghanistan is helping the dollar,'' said Tadatoshi Taso, a foreign exchange manager at Bank of Tokyo-Mitsubishi Ltd.
In other trading, the dollar gained to 1.6620 Swiss francs, from 1.6574 in New York. The British pound was at $1.4263 from $1.4266.