Investing.com - The euro fell to session lows against the dollar on Monday after a senior European Central Bank official said the bank is ready to cut interest rates further, while expectations that the Federal Reserve will soon start scaling back stimulus supported the dollar.
EUR/USD was down 0.42% to 1.3498 during U.S. morning trade from 1.3557 on Friday.
The pair is likely to find support at 1.3450 and resistance at 1.3557, Friday’s high.
The drop in the euro came after after ECB Governing Council member Ardo Hansson said the bank is ready to make further cuts to interest rates and is “technically ready” for negative deposit rates.
“The options on rate cuts are still not fully exhausted and there are all kinds of other measures that are still on the table,” Hansson said.
The comments came amid concerns over mounting deflationary pressures in the euro area after data showed that the annual rate of inflation in the region fell to a four year low of 0.7% in October.
The slowdown in inflation prompted the ECB to cut rates to a record low 0.25% at its November policy meeting.
Investors were looking ahead to preliminary euro zone inflation data for November due for release on Friday, ahead of the ECB’s next monthly meeting on December 5.
The euro pulled back from four year highs against the broadly weaker yen, with EUR/JPY dipping 0.01% to 137.25 after rising as high as 137.99 earlier, the highest level since October 2009.
The yen remained under heavy selling pressure amid heightened expectations that Bank of Japan will implement additional easing measures next year.
Speaking Monday, BoJ Governor Haruhiko Kuroda reiterated that the bank will continue with its massive stimulus program and said the bank was prepared to take further steps if necessary in order to meet its 2% inflation target.
Demand for the traditional safe haven yen was also hit after Iran agreed to limit its nuclear program in exchange for sanctions relief, as part of an agreement with the U.S. and five other world powers.
Elsewhere, the dollar was trading at six-month highs against the yen, with USD/JPY up 0.40% to 101.66, the highest level since May 30.
The dollar continued to remain supported by the view that the Fed could start scaling back its stimulus program at one of its next few meetings.
EUR/USD was down 0.42% to 1.3498 during U.S. morning trade from 1.3557 on Friday.
The pair is likely to find support at 1.3450 and resistance at 1.3557, Friday’s high.
The drop in the euro came after after ECB Governing Council member Ardo Hansson said the bank is ready to make further cuts to interest rates and is “technically ready” for negative deposit rates.
“The options on rate cuts are still not fully exhausted and there are all kinds of other measures that are still on the table,” Hansson said.
The comments came amid concerns over mounting deflationary pressures in the euro area after data showed that the annual rate of inflation in the region fell to a four year low of 0.7% in October.
The slowdown in inflation prompted the ECB to cut rates to a record low 0.25% at its November policy meeting.
Investors were looking ahead to preliminary euro zone inflation data for November due for release on Friday, ahead of the ECB’s next monthly meeting on December 5.
The euro pulled back from four year highs against the broadly weaker yen, with EUR/JPY dipping 0.01% to 137.25 after rising as high as 137.99 earlier, the highest level since October 2009.
The yen remained under heavy selling pressure amid heightened expectations that Bank of Japan will implement additional easing measures next year.
Speaking Monday, BoJ Governor Haruhiko Kuroda reiterated that the bank will continue with its massive stimulus program and said the bank was prepared to take further steps if necessary in order to meet its 2% inflation target.
Demand for the traditional safe haven yen was also hit after Iran agreed to limit its nuclear program in exchange for sanctions relief, as part of an agreement with the U.S. and five other world powers.
Elsewhere, the dollar was trading at six-month highs against the yen, with USD/JPY up 0.40% to 101.66, the highest level since May 30.
The dollar continued to remain supported by the view that the Fed could start scaling back its stimulus program at one of its next few meetings.