Investing.com - The euro fell against the dollar on Tuesday, nearing last week’s four month trough and the single currency was also weaker against the pound and the yen as the latest measures by the European Central Bank to tackle low inflation continued to weigh.
EUR/USD was down 0.36% to 1.3543, not far from the four-month trough of 1.3502 reached last Thursday.
The pair was likely to find support at 1.3500 and resistance at 1.3601, the session high.
Borrowing costs in the peripheral euro zone have fallen sharply in the wake of the ECB’s decision last week to launch a package of measures to avert the threat of persistently low inflation in the euro area, widening the yields between some euro area government bonds and U.S. Treasuries.
The dollar continued to be boosted by rising U.S. Treasury yields. The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.22% to a one-week high of 80.83.
The yield on Greek five-year bonds fell to 3.95% on Tuesday, falling below the New Zealand equivalent, which was yielding 4.01%.
The ECB cut all its main rates to record lows on Thursday and for the first time imposed negative deposit rates on commercial lenders, in a bid to stimulate lending to businesses. ECB President Mario Draghi also outlined a new long-term loan program for banks to promote lending to small and mid-sized businesses and kept the option of quantitative easing on the table.
In contrast, the Fed is expected to start tightening monetary policy in the first half of next year, after its stimulus program winds up later this year.
Demand for the dollar also continued to be underpinned after the latest U.S. jobs report for May showed that the economy added jobs for the fourth successive month, with employment returning to its pre-recession peak.
Elsewhere Tuesday, the euro fell to more than one-week lows against the yen, with EUR/JPY down 0.54% to 138.59.
The single currency fell to one-and-a-half year lows against the pound, with EUR/GBP losing 0.21% to trade at 0.8071.