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Forex - Euro drops to fresh 3-month lows against dollar

Published 05/28/2014, 08:27 AM
Euro touches fresh 3-month lows vs. dollar amid ECB easing expectations

Investing.com - The euro fell to fresh three month lows against the dollar on Wednesday, pressured lower by mounting expectations that the European Central Bank will implement new easing measures at its upcoming policy meeting next week.

EUR/USD hit lows of 1.3605, the weakest since February 13 and was last down 0.21% to 1.3607.

The pair was likely to find support at 1.3575 and resistance at 1.3636, the session high.

The euro has weakened broadly against the other major currencies, falling more than 2% against the dollar since the ECB indicated at its May 8 meeting that it is comfortable with easing monetary policy in June to help shore up the fragile recovery in the region.

On Tuesday, 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 could ease monetary policy as soon as 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%.

Meanwhile, data on Wednesday showed that the number of people unemployed in Germany rose by the largest amount in five years in May. The seasonally adjusted jobless total rose by 24,000 this month to 2.905 million, compared to expectations for a fall of 15,000.

The German unemployment rate remained unchanged at 6.7%, well below the euro zone average of 11.8%.

The euro was also lower against the yen, with EUR/JPY down 0.25% to 138.70, holding above the more than three month low of 138.13 struck last Wednesday.

Elsewhere, the euro pushed higher against sterling, with EUR/GBP easing up 0.17% to 0.8125, recovering from the 17-month low of 0.8080 set last Friday.

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