Investing.com - The euro fell to fresh nine month lows against the dollar on Wednesday, as weak euro zone economic data and renewed concerns over the crisis in Ukraine pressure pressured the single currency lower.
EUR/USD was down 0.26% to 1.3340, the weakest level since November 8.
The pair was likely to find support at around the 1.3300 level and resistance at 1.3375, the session high.
The euro came under renewed selling pressure after official data showed that Italy unexpectedly slid back into a recession in the second quarter, as gross domestic product contracted by 0.2%. Economists had forecast growth of 0.2%.
The economy contracted at an annual rate of 0.3% in the three months to June, compared to expectations for increase of 0.1%, after shrinking 0.4% in the first quarter.
The data came after a report earlier in the day showed that German factory orders dropped 3.2% in June, confounding expectations for a 1.0% increase and were down 4.3% year-over-year.
The weak data added to concerns that the recovery in the euro zone is faltering, as worries over growing deflationary pressures in the region continued.
Investors were looking ahead to the outcome of Thursday’s European Central Bank meeting as concerns over the divergence in monetary policy between it and other major central banks weighed.
The ECB was expected to keep monetary policy unchanged after it cut rates to record lows in June in a bid to avert the threat of deflation in the region.
Demand for the dollar continued to be underpinned after data on Tuesday showed that the U.S. service sector expanded at the fastest pace in more than three years in July and U.S. factory orders rose at a faster than expected rate in June.
Markets were also jittery as a buildup of Russian armed forces along its border with Ukraine fuelled fresh concerns over geopolitical tensions in the region, underpinning safe haven demand.
The euro fell to two-week lows against the yen, with EUR/JPY down 0.54% to 136.46.
Elsewhere, the dollar was also lower against the safe haven yen, with USD/JPY shedding 0.24% to trade at 102.33.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.21% to a fresh 11-month high of 81.76.