Investing.com - The euro was wallowing close to three month lows against the dollar on Thursday as heightened expectations that the European Central Bank will ease monetary policy next week weighed.
EUR/USD was trading at 1.3602, not far from the three month trough of 1.3587 struck on Wednesday.
The pair was likely to find support at 1.3550 and resistance at 1.3636, Wednesday’s high.
The euro has fallen more than 2% against the dollar since the ECB indicated at its May 8 meeting that it is comfortable with easing monetary policy next month, to help shore up the fragile recovery in the region.
Earlier this week, ECB President Mario Draghi said the bank was aware of the risks of persistently low inflation and was prepared to take steps to get euro zone inflation back to its target, the latest indication that the bank is on course to ease monetary policy next week.
The annual rate of euro zone inflation was 0.7% in April, well below the ECB's target of close to but just below 2%.
Weak data on employment from Germany and France on Wednesday reinforced expectations that the ECB will act.
The euro was also close to three month lows against the yen, with EUR/JPY slipping 0.10% to 138.27.
Elsewhere, the dollar slid lower against the yen, with USD/JPY losing 0.14% to trade at 101.69. The greenback softened against the yen after U.S. Treasury yields fell to an almost one-year low on Wednesday.