Investing.com - The euro hit fresh nine-year lows against the dollar on Wednesday after data showing that consumer prices in the euro area fell in December for the first time in more than five years added to pressure on the European Central Bank to step up stimulus measures.
EUR/USD touched lows of 1.1842, the weakest level since February 2006, down from 1.1888 late Tuesday.
The European Union’s statistical agency Eurostat reported that the annual rate of euro zone inflation fell by 0.2% in December, down from 0.3% in November. Economists had expected an annual decline of 0.1%. It was the first fall in the annual rate of inflation since October 2009.
Core inflation, which strips out volatile measures such as food and energy costs, rose 0.8% on a year-over-year basis, but was still well below the ECB’s target of close to, but just under 2%.
The decline in consumer prices added to expectations that the ECB could implement quantitative easing as soon as its next meeting on January 22. Late last week ECB President Mario Draghi said the risk of it not fulfilling its mandate of price stability is higher now than six months ago.
In a separate report Wednesday, Eurostat said the euro zone’s unemployment rate was unchanged at 11.5% in November for the sixth straight month, but the number of people without jobs rose for the third consecutive month, by 34,000 to 18.394 million.
The euro pared gains against the yen, with EUR/JPY at 141.15, down from 141.65 earlier.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, was near nine-year peaks at 92.13, supported by weakness in the euro.
The Federal Reserve was to publish the minutes of its latest policy meeting later Wednesday, which were expected to provide further indications on the future direction of monetary policy.