Investing.com - The euro fell to fresh nine-year lows against the dollar on Wednesday as investors awaited data on euro zone inflation later in the day, amid mounting expectations that the European Central Bank will step up stimulus measures early this year.
EUR/USD hit lows of 1.1851, the weakest since February 2006 and was last at 1.1876, down from 1.1888 late Tuesday.
The euro zone was to release preliminary data on inflation later Wednesday and economists have forecast an annualized decline of 0.1%, which would be the first drop since 2009.
A fall in consumer prices would add to pressure on the ECB to step up measures to combat the threat of deflation in the region.
Late last week ECB President Mario Draghi said the risk of it not fulfilling its mandate of price stability is higher now than six months ago. The remarks indicated that the likelihood of full blown quantitative easing has increased ahead of the ECB’s meeting on January 22.
The euro was higher against the yen, with EUR/JPY rising 0.54% to 141.59, off Tuesday’s two-month lows of 140.53.
The dollar also gained ground against the yen, with USD/JPY rising 0.58% to 119.12, recovering from Tuesday’s low of 118.04.
Modest gains in Asian equity markets overnight dampened demand for the safe haven yen as investor sentiment recovered following a selloff earlier in the week.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, hit nine-year highs of 92.14 and was last at 91.97, supported by weakness in the euro.
The Federal Reserve was to publish the minutes of its latest policy meeting later Wednesday, which were expected to provide further indications on the future direction of monetary policy.