The euro fell against other major currencies ahead of a meeting by the European Central Bank, as investors waited for the bank to unveil fresh growth forecasts for the eurozone. The single currency dipped 0.2 per cent to $1.3042 ahead of the decision on interest rates by the ECB at 12.45pm GMT and a press conference to follow at 1.30pm GMT. While market participants were not pricing in any rate cuts, investors were keenly awaiting the projections from Mario Draghi, the ECB president, for growth and inflation next year in the troubled eurozone. “Indications that the ECB now expects the eurozone recession to continue next year could be seen as a dovish surprise and investors could start pricing in earlier rate cuts than before,� said analysts at Citigroup. The euro also fell 0.1 per cent against the UK pound to £0.8106. But the pound was weaker against the dollar following the UK chancellor’s Autumn Statement on Wednesday, which confirmed that the UK faced another year of austerity measures. Sterling remains at threat of a downgrade to the UK’s triple A credit rating next year, with Fitch Ratings warning on Wednesday night that the credibility of the UK’s fiscal framework had been damaged. The pound fell 0.1 per cent to $1.6079 ahead of the Bank of England’s monthly decision on interest rates and any further monetary easing measures, with no changes expected. The Swiss franc weakened after inflation figures showed that Switzerland was still experiencing deflation, after CPI fell more than expected in November, to minus 0.4 per cent from the previous year and minus 0.3 per cent from the previous month. “A bigger than expected fall in Swiss CPI . . . reinforces the depth of deflation and the pressure to not let the Swiss franc be strong,� said Kit Juckes, currency strategist at Société Générale. The New Zealand dollar rose after the Reserve Bank of New Zealand kept interest rates on hold at 2.5 per cent, as expected, but delivered what analysts interpreted as a more hawkish statement. “Overall, this week’s policy events in the Antipodes suggest some downside risks to the Australian dollar/New Zealand dollar cross,� said analysts at Credit Suisse. “In contrast to the shift from the RBNZ, the RBA appeared to have grown more concerned about Australian dollar strength.� The New Zealand dollar rose 0.1 per cent against the US dollar to $0.8307, while the Australian dollar was 0.2 per cent higher at $1.0481 after Australia’s unemployment rate unexpectedly fell in November.

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