Investing.com -- EUR/USD fell mildly on Monday, as investors await a critical meeting by the European Central Bank later this week for hints from Mario Draghi of a potential expansion of a comprehensive €1.1 trillion bond buying program.
The currency pair traded in a tight range between 1.1306 and 1.1379 before settling at 1.1327, up 0.28% on the session. After nearly surging to 1.15 last week, the euro has now closed down against the dollar in three of four sessions. Over the last month of trading, though, the euro is still up by roughly 0.2% versus its American counterpart.
EUR/USD likely gained support at 1.1170, the low from October 5 and was likely met with resistance at 1.1496, the high from Oct. 15.
Currency traders were hesitant to make any major moves ahead of the ECB's monetary policy meeting in Malta on Thursday. In September, inflation in the euro zone fell by 0.1% from its level a month earlier, marking the first time it dropped below zero since March.
During the same month, the ECB launched a long-term €60 billion a month quantitative easing program aimed at stimulating economic growth throughout the zone. Draghi also noted in September that the ECB could extend the quantitative easing beyond September, 2016, if needed. Many prominent economists in Europe do not expect the ECB to make any decisive changes to the program at the meeting. Still, ECB policymaker Ewald Nowotny argued last week that further action could be required to help the bank reach its inflation target. One option could be to increase the bond purchases to €80 billion a month before the end of the year.
Elsewhere, weak data on third quarter GDP growth in China spilled over into global foreign exchange markets during Monday's trade. In overnight trading, China's National Bureau of Statistics reported that GDP growth grew at 6.9% for the third quarter, decelerating at the slowest pace in more than six years. It marks the slowest period of growth in the world's second-largest economy since the first quarter of 2009 when Chinese GDP rose by 6.2%. The dismal reading could add pressure on the People's Bank of China to introduce fresh stimulus measures following its shocking devaluation of the yuan in August.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, gained more than 0.25% on Monday to an intraday high of 95.05 before settling at 94.97. The index has closed higher in four straight sessions.