Investing.com - The euro touched intra-day lows against the dollar on Monday after European Central Bank President Mario Draghi warned that the euro zone economy is still weak and that the economic outlook remains to the downside.
EUR/USD hit 1.3322 during U.S. morning hours, the session low; the pair subsequently consolidated at 1.3340, slipping 0.16%.
The pair was likely to find support at 1.3263, the low of January 23 and resistance at 1.3392, Friday’s high.
Draghi said that that Europe "entered 2013 in a more stable financial environment than in recent years", but warned that the economy is still weak following three quarters of contraction and will only recover slowly this year.
The comments came in testimony to the European Parliament's committee on economic and monetary affairs.
Draghi also said the euro’s exchange rate is not a policy target but reiterated that it is important for growth and price stability.
The comments came amid speculation that data last week showing that the recession in the euro zone deepened in the fourth quarter could lead to a possible rate cut by the ECB.
The bloc’s economy contracted by 0.6% in the three months to December, compared to expectations for a decline of 0.4%.
Earlier Monday, ECB Governing Council member Ewald Nowotny said the euro zone economy is likely to bottom out in the first quarter of this year before beginning a slow recovery.
Elsewhere, the euro was slightly higher against the pound, with EUR/GBP inching up 0.12% to 0.8621 and gained ground against the yen, with EUR/JPY rising 0.36% to 125.63.
The yen was lower against the euro and the dollar on Monday after Japan avoided criticism from the Group of 20 nations over policies that have led to a recent sharp decline in the yen.
Trade was expected to remain subdued on Monday, with U.S. markets closed for the President’s Day holiday.
EUR/USD hit 1.3322 during U.S. morning hours, the session low; the pair subsequently consolidated at 1.3340, slipping 0.16%.
The pair was likely to find support at 1.3263, the low of January 23 and resistance at 1.3392, Friday’s high.
Draghi said that that Europe "entered 2013 in a more stable financial environment than in recent years", but warned that the economy is still weak following three quarters of contraction and will only recover slowly this year.
The comments came in testimony to the European Parliament's committee on economic and monetary affairs.
Draghi also said the euro’s exchange rate is not a policy target but reiterated that it is important for growth and price stability.
The comments came amid speculation that data last week showing that the recession in the euro zone deepened in the fourth quarter could lead to a possible rate cut by the ECB.
The bloc’s economy contracted by 0.6% in the three months to December, compared to expectations for a decline of 0.4%.
Earlier Monday, ECB Governing Council member Ewald Nowotny said the euro zone economy is likely to bottom out in the first quarter of this year before beginning a slow recovery.
Elsewhere, the euro was slightly higher against the pound, with EUR/GBP inching up 0.12% to 0.8621 and gained ground against the yen, with EUR/JPY rising 0.36% to 125.63.
The yen was lower against the euro and the dollar on Monday after Japan avoided criticism from the Group of 20 nations over policies that have led to a recent sharp decline in the yen.
Trade was expected to remain subdued on Monday, with U.S. markets closed for the President’s Day holiday.