SEPT 25 THURSDAY

Dollar Falls as Traders Bet on Fed Cut, Bush Warns of Recession .

The dollar fell against the euro, ending a two-day gain, as

President George W. Bush warned the U.S. may face a ``

painful'' recession and traders bet on a Federal Reserve

interest-rate cut next month.

The dollar weakened versus the British pound and Swiss

franc before a U.S. government report today that economists

forecast will show home sales declined, extending the worst

housing slump in 17 years. Futures contracts indicate

80 percent odds the Fed will lower borrowing costs in

October as Congress delays a $700 billion bailout

proposal.

The dollar fell to $1.4724 per euro as of 6:35 a.m. in London

from $1.4621 late in New York yesterday.

The odds of the Fed lowering its 2 percent benchmark rate by

a quarter-percentage point at its Oct. 29 policy meeting were

80 percent yesterday, compared with 58 percent on Sept. 23,

futures contracts on the Chicago Board of Trade showed.

The U.S. Dollar Index traded on ICE futures in New York, which

tracks the greenback against the currencies of six major trading

partners, slipped to 76.537 from 76.788 yesterday. It touched

75.890 on Sept. 22, the lowest since Aug. 13.

The dollar dropped versus 13 of the 16 most-active currencies

today. It has fallen 6 percent against the euro since touching a

one-year high of $1.3882 on Sept. 11. The dollar reached

$1.6038 on July 15, the weakest level since the European

currency made its debut in 1999.