The euro saw weakness against other majors on Tuesday in New York as a final report from the Eurostat showed that economic contraction in the Eurozone in the fourth quarter was deeper than initially feared.

Eurozone gross domestic product contracted by a record 1.6% quarter-on-quarter in the final three months of 2008. The pace of decline was slightly up from the previously estimated fall of 1.5%. GDP fell 0.3% each in the previous two quarters.

The euro slipped to a weekly low of 1.3225 against the dollar. On Monday, the single currency had reached a 10-day high of 1.3582. There was no major economic data planned from the U.S. on Tuesday.

The European currency dropped to a four-week low of 0.8989 versus the British pound. The euro has been trending lower since mid-March.

UK's Office for National Statistics reported 6.5% decline in UK manufacturing output during three months to February compared with the three months to November 2008. This was the biggest decline since 1968. Output was 12.2% lower than the same period a year ago.

Industrial production declined 1% month-on-month in February. Economists had expected output to fall 1.2% in February, following a 2.7% decrease in January.

The euro reached a five-day low of 132.20 against the yen but pared much of its daily slump in the mid-morning. The single currency remains well off the five-month high of 137.41 reached earlier this week.

Tuesday, the Bank of Japan retained its key interest rate, but it decided to expand the range of eligible collateral in order to make funds easily available.

The Policy Board of Japan's central bank unanimously voted to hold the uncollateralized overnight call rate at 0.1 percent. The decision came in line with economists' expectations. The previous change in interest rates was a 20 basis point cut implemented in December 2008.

In other economic news from the Eurozone, European Central Bank member Georgios Provopoulos told Bloomberg news the ECB could cut its interest rates below 1%.

Germany's Federal Statistical Office announced that the raw steel production in metallurgical plants dropped 49.8% year-on-year.

Hourly wages in Italy rose 3.5% year-on-year in February after rising 4.3% in January, statistical office ISTAT said. On a monthly basis, wages rose 0.3%, slower than 0.8% growth recorded in the previous month.

The Statistical Office of the Republic of Slovenia announced that the jobless rate stood at 4.4% in 2008, down from 4.9% in the previous year.

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