(REUTERS) -- The euro sank to a fresh 16-month low versus the dollar on Friday as fears about an imminent downgrade of euro zone countries had investors betting against the common currency. A senior euro zone government source said credit rating agency Standard & Poor's is set to downgrade several euro zone countries, not including Germany.

The euro hit a low of $1.2636 and last traded at $1.2636, down 1.5 percent on the day, according to Reuters data.

The dollar, meanwhile, climbed to a session high against the Swiss franc at 0.9562 and last traded at 0.9558, up 1.3 percent on the day after data showed U.S. consumer sentiment continued to pick up steam in January.