The euro fell to a session low against the dollar on Thursday after German manufacturing activity sank to a three-year low, raising concerns the euro zone's largest economny could slip into recession as the debt crisis intensifies.

The common currency sank to $1.2650, with traders citing selling by a European bank and supporting bids around $1.2640.

The dollar was also firmer after the U.S. Federal Reserve delivered a more modest dose of monetary easing than some in the market had been positioned for.

reuters