Sept. 24 (Bloomberg) -- The dollar fell to a record low against the euro and declined versus the yen on speculation economic reports will show U.S. growth is losing momentum, adding to pressure on the Federal Reserve to cut interest rates again.

The U.S. dollar weakened against 13 of the 16 most-active currencies before data tomorrow that will show the lowest existing home sales in five years and the weakest household confidence in more than a year, according to Bloomberg News surveys. It also dropped to a 15-year low against a basket of six of its major peers.

``The U.S. economic outlook argues for further weakness in the dollar,'' said Ian Stannard, senior currency strategy at BNP Paribas SA in London. ``We expect the U.S. economy to slow quite rapidly over the course of the next few quarters. That will lead to further rate cuts.''

The dollar traded at $1.4130, the third day it has fallen to an all-time low against the European currency. It was at $1.4119 as of 7:05 a.m. in New York, from $1.4091 on Sept. 21. It was also 0.4 percent lower against the yen at 114.94, from 115.50 last week. Against the pound, the dollar slipped to $2.0261, the lowest since Sept. 13, from $2.0203. It may fall to $1.45 versus the euro in coming weeks, Stannard said. With Japanese markets closed for the Autumn Equinox holiday, trading was less than usual.

Currency Basket

The dollar fell to September 1992 low on a trade-weighted index that measures its value against a basket of six major currencies. It fell to 78.31 from 78.6 on Sept. 21.

Since the Fed cut the target rate for overnight lending between banks by 50 basis points on Sept. 18, traders have pushed the yield on Treasury two-year notes to almost three-quarters of a point below the 4.75 percent benchmark rate.

In the three previous occasions during the past 20 years when that has happened, policy makers have cut borrowing costs. The Fed next meets Oct. 31.

Sarah Hewin, a senior economist at American Express Bank in London, said she sees a ``significant'' risk of a U.S. recession.

``Housing does seem to be indicating there's a significant risk of recession,'' said Hewin. ``We would perhaps give a 30 to 40 percent chance of a recession coming through the U.S.''

The U.S. currency dropped to as low as 5.5012 Norwegian krone, the lowest since November 1980, and to $1.0015 against the Canadian dollar, from $0.9992 on Sept. 21, when it declined to a 31-year low of $1.0064.

Saudi Arabian Peg

Speculation that Saudi Arabia may either end the peg to, or revalue its currency also weighed on the dollar.

The Saudi Arabian Monetary Agency may revalue the riyal if the dollar extend its drop, Asharq al-Awsat reported Sept. 23, citing an unidentified official close to SAMA. The riyal is pegged at 3.75 to the dollar.

Gains in the euro were limited as European Central Bank board member Christian Noyer reiterated the Group of Seven's statement that excess currency volatility is ``undesirable.''

``Any abrupt change in the dollar value could seriously hamper global economic growth,'' he said at a conference in Hong Kong today.

The euro has gained 7 percent against the dollar and 3.3 percent against the yen so far this year, prompting the German Finance Ministry to say Sept. 20 the currency's appreciation hurts exports by making them more expensive overseas.

``There's a good chance that complaints from Europe will pick up and that those complaints will carry more weight,'' said Thomas Harr, senior foreign exchange strategist at Standard Chartered Plc in Singapore.

Asian Strength

The dollar also slid against Asian currencies on speculation the region's central banks will keep rates on hold as the Fed lowers them. U.S. home resales fell 4.5 percent to an annual rate of 5.49 million, according to a survey of economists before the National Association of Realtors report. The Conference Board index of consumer confidence dropped to 104.4 this month from 105 in August, a separate survey showed.

The Malaysian ringgit rose to an eight-week high of 3.4331 against the dollar, the Philippine peso reached 45.16, the highest in six weeks, and the Indonesian rupiah advanced to a two-month peak of 9,132.

Futures traders raised their bets on the euro gaining against the dollar, figures from the Washington-based Commodity Futures Trading Commission showed.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop -- so-called net longs -- was 86,049 on Sept. 18, compared with net longs of 58,214 a week earlier.

New Prime Minister

Gains in the yen may be limited by speculation Yasuo Fukuda, the new leader of Japan's ruling Liberal Democratic Party, will struggle to pass laws after his likely confirmation as prime minister tomorrow. The currency may fall against the euro on prospects Fukuda will slow structural reforms to woo voters.

``Some in the market expect there will be lessened focus on structural reforms, which could lead to stock weakness,'' said Dai Sato, manager of the Singapore treasury department at Mizuho Corporate Bank Ltd. ``The BOJ isn't in an environment where it may be able to raise rates. The yen is unlikely to strengthen.''

The yen traded at 162.31 against the euro from 162.64. It may decline to 163.00 per euro today, Sato said.

To contact the reporter on this story: Anchalee Worrachate in London at aworrachate@bloomberg.net; Stanley White in Tokyo at swhite28@bloomberg.net

Last Updated: September 24, 2007 07:09 EDT