Investing.com - The euro was trading close to 11-year lows against the dollar on Tuesday as investors anticipated possible monetary easing by the European Central Bank this week, while Chinese growth data boosted the dollar against the yen.
EUR/USD dipped 0.15% to 1.1585, not far from last Friday’s 11-year trough of 1.1459.
The euro shrugged off data showing that German economic sentiment rose to its highest level in nearly a year this month.
The closely watched ZEW index of German economic sentiment rose for a third month to 48.4 in January from 34.9 in December, ahead of forecasts of 40.0.
The report boosted hopes that Germany’s economy, the euro zone’s largest would rebound in 2015 after weakening at the end of last year.
The ZEW survey of euro zone economic sentiment increased to a six-month high of 45.2 from 31.8 in December, beating forecasts of 37.6.
The euro remained under pressure as investors waited to see if the ECB would embark on an outright quantitative easing program at its upcoming meeting on Thursday.
The single currency has been pressured lower by mounting expectations that the ECB will launch a government bond-buying program, in a bid to stave off the threat of deflation in the euro area.
Uncertainty over the outcome of Greek elections, due to be held on Sunday, with anti-bailout party Syriza leading in the polls also weighed.
In other trade, USD/JPY was up 0.76% to one-week highs of 118.47.
The safe-haven yen slid lower earlier Tuesday after figures showing that economic growth in China remained steady in the fourth quarter.
China’s economy expanded at an annual rate of 7.3% in the three months to December. Economists had expected growth in the world’s second-largest economy to slow to 7.2% from 7.3% in the third quarter.
On a quarter-over-quarter basis, China’s economy slowed to 1.5% from 1.9% in the third quarter, compared to forecasts for 1.7%.
The dollar received an additional boost after the International Monetary Fund raised its outlook for U.S. growth this year, despite lowering its forecasts for the other major global economies.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.27% to 93.10.