The euro tumbled to a new two-year low against the dollar yesterday as concerns about global economic growth and lowered expectations of near-term US Federal Reserve action had investors wary of taking on risk. The traditional safe-haven Japanese yen strongly outperformed both the euro and US dollar after the Bank of Japan limited itself to tweaking its asset buying program rather than easing monetary policy, in contrast to recent policy easing moves by central banks in the euro zone, Britain and China. The dollar briefly gained against the yen after data showed the number of Americans lining up for jobless benefits last week fell to a four-year low. To be sure, fresh evidence of a cooling global economy was reflected in a separate report showing US import prices falling sharply in June. “The environment is negative for the euro and pressure is mounting against it,” said Camilla Sutton, chief currency strategist at Scotiabank in Toronto. A test of the June 2010 low of $1.1875, according to Reuters data, is a material risk, but that could be temporary as a strong dollar is likely to increase the risk of more aggressive Fed policy, according to Sutton. “As long as the door is open to QE3, it is difficult to see an environment where the dollar can prove materially and sustainably strong,” she said. “Accordingly, we continue to expect the euro to trend lower, but avert a collapse.” Minutes from the Federal Reserve’s June meeting released on Wednesday showed the Fed is open to a third round of quantitative easing to stimulate the economy, but the recovery might need to weaken for a consensus to build. With speculators and long-term currency investors worried about Europe’s lack of progress in tackling its debt crisis the euro fell to $ 1.2165, its lowest since mid-2010. The euro last traded at $ 1.2184, down 0.4 percent on the day. Against the yen, the euro fell to a six-week low of 96.40. It last traded at 96.60, down 1 percent on the day. “Every single central bank except for the Fed is easing, and until that happens we expect the dollar to stay supported,” said George Saravelos, G-10 currency strategist at Deutsche Bank. “The euro is likely to weaken further as it will be hurt by the ECB’s decision to cut the deposit rate and there will be a shift in funding.” The euro has shed 5.9 percent so far this year, already exceeding the losses it chalked up in 2011, with losses accelerating after last week’s cut by the ECB. The unprecedented cut in the deposit rate meant that banks will earn nothing for parking excess funds at the central bank. Besides, the zero rates would encourage investors to sell the low-yielding euro and buy higher-yielding riskier currencies. Traders expect 800 billion euros that banks used to park with the ECB would start leaving the euro zone in the hunt for better yields. Indeed, data published by the ECB showed banks parked 325 billion euros overnight, well down on both the 800 billion they left there the previous day. The Bank of Japan held its policy rate in a range of zero to 0.1 percent, though it did tweak its asset-buying and lending program. The dollar was last down 0.6 percent at 79.24 yen, holding above chart support at the 200-day moving average around 79.01 yen. Governor Masaaki Shirakawa said on Thursday the BOJ would not automatically link its policy with that of other central banks. Markets are anxiously awaiting Friday’s second quarter gross domestic product growth number from China, which is expected to show one of the few growth engines in the world economy is faltering. A Reuters poll showed economists expect China’s growth to have slowed to 7.6 percent in the second quarter, its worst performance since the 2008/09 financial crisis.