The euro traded 0.4 percent close to its weakest level against the dollar since November just before the European Central Bank convenes this week. The shared currency has lost 3.2 percent of its value over the last three months after the ECB slashed interest rates and injected further liquidity into the region’s banking system in order to stimulate growth and inflation.
The euro remained slightly unchanged at $1.3421 by 7:16 a.m. in New York after earlier rising to $1.3367 on July 30, the weakest level since November 12. It also stood at 137.73 yen. The Japanese currency remained steady at 102.63 per dollar after sliding 0.8 percent over the past week, the steepest decline since the weekly session through April 18.
“The downside risk for the euro persists, and our view is that the currency has further to go,” Valentin Marinov, a London-based head of European Group-of-10 currency strategy at Citigroup Inc, told Bloomberg. “The euro weakness was driven mostly by the ECB’s policy and we expect more from the central bank. Their task is far from done.”
Euro area consumer prices increased 0.4 percent from a year ago in July, down from 0.5 percent a month earlier. This was the slowest growth since October 2009.
Meanwhile, the pound ended a five-day losing streak versus the euro as the market awaits data this week that will indicate that UK industrial production rose in July, house prices increased and services activity grew.
The pound advanced 0.1 percent to trade at 79.76 pence per euro after falling 0.9 percent in the five days ended August 1, the most since the trading week through February 21. The sterling remained slightly unchanged at $1.6827. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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