LONDON (AFP) - The euro fell against the dollar on Thursday after Germany reported a plunge in industrial and construction output while the Swiss franc weakened following a cut in interest rates in Switzerland. Europe's single currency was changing hands at 1.2810 dollars in late trade in London compared to 1.2842 dollars late on Wednesday. The euro meanwhile gained against the Japanese yen after more gloomy data on Japan's recession, rising to 125.19 yen compared to 124.94 yen on Wednesday. The dollar also rose to 97.95 yen from 97.29 yen on Wednesday. The main factor dragging down the euro, traders said, was a 7.5-percent drop in German industrial and construction output in January from December - the worst performance for the Europe's biggest economy in nearly 20 years. Germany's Commerzbank said the data - described as "breathtaking by one analyst - "should add to the view that the downward momentum in eurozone GDP (gross domestic product) is still accelerating." French bank BNP Paribas said in a statement: "This negative data from Germany and the continued lack of coordination going into the G20 meeting... may take their toll on the euro today." Deep splits have emerged ahead of a G20 finance ministerial meeting near London on Saturday, with the United States urging more spending on stimulus plans by other G20 countries and European nations putting their foot down. Adding to the market movements, European Central Bank chief Jean-Claude Trichet reiterated comments that the ECB could cut interest rates in the eurozone again after slashing them by 0.50 percent last week. Switzerland's central bank cut its key interest rate on Thursday by a quarter point to a range of zero to 0.75 percent, matching a historic low in a bid to counter a sharper than forecast recession. The Swiss National Bank's report also showed that Switzerland's economy was threatened by sustained deflation, which could harm the bank's target of price stability, as well as the strength of the Swiss franc. The bank said it was now forecasting that Switzerland's economy would contract by 2.5 to 3.0 percent in 2009 instead of the minus 0.5 to 1.0 percent forecast just three months ago. "The economic situation has deteriorated sharply since last December and there is a risk of negative inflation over the next three years," the SNB said in a statement. "Decisive action is thus called for to forcefully relax monetary conditions." "With these exceptional measures, the SNB is helping to cushion the effects of the economic and financial crisis, with the aim of limiting the risk of deflation," the central bank added. Within a few hours of the announcement, the Swiss franc had lost almost half its value against the euro and a quarter of its value against the dollar. In London trade on Thursday, the euro was changing hands at 1.2810 dollars against 1.2842 dollars late on Wednesday, 125.19 yen (124.94), 0.9262 pounds (0.9260) and 1.5235 Swiss francs (1.4804). The dollar stood at 97.95 yen (97.29) and 1.1919 Swiss francs (1.1525). The pound was at 1.3799 dollars (1.3862).