Investing.com - The euro edged lower against the dollar and the yen on Monday as investors turned their attention to the upcoming European Central Bank meeting on Thursday amid ongoing concerns over the threat of deflationary pressures in the euro area.
EUR/USD eased down 0.06% to 1.3420, off Friday’s highs of 1.3443. The pair remained supported above the eight month lows of 1.3366 reached last Wednesday.
The pair was likely to find support at 1.3366 and resistance at the 1.3450 level.
The euro moved higher against the dollar on Friday after weaker than expected U.S. employment data prompted investors to curtail expectations on the timing of a possible rate hike by the Federal Reserve.
The U.S. economy added 209,000 jobs in July, below forecasts for jobs growth of 233,000 the Labor Department said.
Although it was the sixth successive month that the U.S. economy added more than 200,000 jobs, the unemployment rate unexpectedly ticked up to 6.2% from 6.1% in June. In addition, wage growth was flat, pointing to underlying slack in the economy.
The single currency turned lower on Monday as investors looked ahead to the conclusion of the ECB’s monthly monetary policy review later in the week.
Data late last week showed that the annual rate of inflation in the euro area slowed to 0.4% in July from 0.5% in June, adding to pressure on the bank to implement further easing measures to avert the risk of deflation in the region.
The euro was also lower against the yen, with EUR/JPY slipping 0.13% to 137.58.
Elsewhere Monday, the dollar was also slightly lower against the yen, with USD/JPY sliding 0.11% to 102.51, off the almost four month highs of 103.07 set last Wednesday.