The dollar decreased in value against the euro this morning, continuing last year’s 10 percent decline, on speculation a slowdown in U.S. manufacturing will give the Federal Reserve more reason to lower interest rates, Bloomberg reported.

The dollar fell near its lowest level in three weeks against the yen on speculation the Institute for Supply Management will say today that factories expanded production at the slowest pace in 11 months in December. The U.S. currency weakened against 13 of the 16 most actively traded currencies as traders bet that the Fed will reduce borrowing costs at least twice in 2008.

“The market is going into the year thinking there’s plenty of Fed easing to come,” said Alan Ruskin, head of international currency strategy at RBS Greenwich Capital Markets in Greenwich, Conn. “The tone in general is certainly still dollar-negative.”

The U.S. currency fell to $1.4667 per euro early today, from $1.4592 yesterday. It dropped to $1.4967 on Nov. 23, the lowest since the euro’s introduction in 1999. The dollar traded at 111.56 yen, compared with 111.64 yen yesterday. The euro rose 0.5 percent to 163.62 yen, extending its eighth consecutive annual gain versus the Japanese currency.

The dollar weakened the most against the New Zealand dollar, declining 0.9 percent. It dropped 0.5 percent versus Canada’s dollar and 0.6 percent against the Swiss franc. Australia’s dollar advanced for a second straight day against the U.S. currency after a private report showed manufacturing expanded at the fastest pace in more than five years in December, supported by business and consumer spending. The currency climbed 0.6 percent against the U.S. dollar. The dollar fell 0.7 percent versus Brazil’s real, 0.4 percent against the South African rand and 0.3 percent versus the Turkish lira.