Dollar plunges to 13-1/2 year trough vs yen, below 88… European, U.S. government debt touch fresh historic lows… Morgan Stanley’s, PNB Paribas’ losses lead stocks lower… Oil slips; OPEC’s record cut doesn’t offset demand slide

The dollar fell anew against the euro and yen while yields on U.S. and European government debt traded at or near historic lows on Wednesday, a day after the bold credit easing by the Federal Reserve to combat a worsening recession.

Oil prices dropped as much as $3 a barrel after dealers said a record supply cut by the Organization of Petroleum Exporting Countries would not be enough to counter slumping energy demand brought on by the global economic downturn.

Equity markets on either side of the Atlantic slid as the initial enthusiasm over the Fed’s surprisingly aggressive interest rate cut on Tuesday gave way to weak financial results at key banks and