LONDON, Dec 17 (Reuters) - The dollar fell broadly on Wednesday, hitting a 2 1/2-month low against the euro and heading towards a 13-year low versus the yen after the Federal Reserve slashed interest rates to between zero and 0.25 percent.
The euro climbed as high as $1.4192 according to electronic trading platform EBS in Asian trade, after the Fed said it would use "all available tools" to support the economy from a recession after cutting the Fed funds rate from 1 percent to a record low.
It added that it was mulling possible purchases of longer-term U.S. Treasury debt and would consider other ways to tap its burgeoning balance sheet to support the economy. [ID:nN16593807].
The announcement triggered broad selling in the dollar, as the market had expected a smaller rate cut of 50 basis points. Analysts said the outlook for the greenback looked bleak going into the year-end, with repatriation flows seen drying up.
"The main trend going into Christmas and year-end will be one of dollar weakness," UBS currency analyst Geoff Kendrick said.
At 0855 GMT, the dollar had fallen 0.7 percent on the day to 88.21 yen , hovering close to a 13-year low of 88.10 yen hit on trading platform EBS last week.
The euro gained 0.2 percent against the dollar to $1.4126, not far off an earlier two-and-a-half month high of $1.4192 hit on EBS during Asian trade.
Yen gains versus the U.S. currency helped to push the euro down 0.5 percent to 124.82 yen .
