The euro dropped to its lowest since April 2006 versus the dollar amid concern European measures to reduce fiscal deficits will undermine the region’s recovery.

The 16-nation currency slid after European Central Bank President Jean-Claude Trichet called for a “quantum leap” in the way euro-area nations set their budgets. Futures traders last week increased bets to a record that the euro will fall following a 750 billion-euro ($927 billion) bailout to contain a sovereign-debt crisis.

The euro dropped to as low as $1.2306, the weakest since April 21, 2006, before trading at $1.2308 as of 11:12 a.m. in Tokyo. Europe’s currency slid to 113.53 yen from 114.38 last week. The yen rose to 92.24 per dollar from 92.47.

(Source: Bloomberg.com)