Investing.com - The euro fell to session lows against the dollar on Wednesday as investors remained cautious ahead of the European Central Bank’s policy meeting on Thursday, amid growing concerns over the threat of deflation in the region.
EUR/USD touched session lows of 1.3766 and was last down 0.17% to 1.3767.
The pair was likely to find support at 13704, last Friday’s low and a one-month low and resistance at 1.3800.
The dollar remained steady following the release of upbeat U.S. private sector employment data, and a stronger-than-forecast reading on U.S. factory orders.
Payroll processing firm ADP reported that the U.S. private sector added 191,000 jobs last month, slightly below expectations for jobs growth of 195,000.
February’s figure was revised up to a gain of 178,000 from a previously reported increase of 139,000.
While the report is not viewed as a reliable guide for the government jobs report due on Friday, it does give guidance on private-sector hiring.
Separately, the Commerce Department said U.S. factory orders jumped 1.6% in February, the biggest increase since September and ahead of forecasts for a 1.2% rise.
The euro came under pressure before Thursday’s ECB meeting, after data on Monday showed that the annual rate of euro zone inflation slowed to 0.5% in March, the lowest since November 2009.
Data released on Wednesday showing that euro zone producer prices fell in February added to pressure on the ECB to implement fresh policy measures to stave off the risk of deflation.
However some investors expected the ECB to leave monetary policy on hold, after Bundesbank head Jens Weidmann said over the weekend that the euro zone is not in a deflationary cycle, and that the recent slowdown in inflation was due in large part to temporary factors, such as falls in food and energy prices.
Elsewhere, the shared currency edged lower against the yen, with EUR/JPY dipping 0.06% to 142.88 and was also weaker against the pound, with EUR/GBP down 0.18% to 0.8279.