By Daniel Kruger Oct. 9 (Bloomberg) -- The euro will benefit against the dollar should the European Central Bank lower overnight borrowing costs on its own after joining a coordinated easing by central banks around the world, Citigroup Global Markets Inc. analysts wrote today in a note to clients. The ECB lowered its overnight lending rate by half a percentage point to 3.75 percent yesterday, the Federal Reserve reduced its target lending rate by a half-percentage point to 1.5 percent and the U.K., Canada, Sweden and Switzerland also reduced rates. Separately, China's central bank lowered its key one-year lending rate. The euro's price against the dollar already reflects expectations that the difference between the benchmark rates for the Fed and the ECB will narrow in the future, which the coordinated cut did not change, wrote analysts Shyam Devani, Todd Elmer, Tom Fitzpatrick, Michael Hart and Mike Rosborough. ``Independent rate cuts are more likely to fuel further gains in the euro as it will demonstrate the capacity for the ECB to be proactive on economic and financial developments rather than reactive to lagging inflation data,'' the analysts wrote. Fitzpatrick did not immediately respond to a phone call and an e-mail message. 200-Week Average One risk to the euro is its rapid fall opens a potential weekly close below its 200-week moving average of $1.3379 per euro, which would open the dollar to a potential rally to $1.28, the analysts wrote. The dollar was little changed against the euro, trading at $1.3675 at 1:49 p.m. in New York, from $1.3654 yesterday. The euro has fallen 14 percent since peaking at $1.6038 on July 15, the highest since the inception of the 15-nation currency in 1999. The euro has fallen 13 percent against the dollar since the end of June as the credit crisis has worsened in Europe while the ECB has been less aggressive than the Fed in addressing problems. On Oct. 7 the Fed said it would accept short-term corporate IOUs, known as commercial paper, as collateral for cash loans. The central bank has also made $122.8 billion in credit available to American International Group Inc., the largest U.S. insurer by assets, to stave off its potential collapse, which threatens to exacerbate stresses in the market for credit default swaps. To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net

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