Investing.com - The euro slid to session lows against the dollar on Wednesday, amid concerns that the European Central Bank could flag possible interest rate cuts in the coming months following its policy meeting on Thursday.
EUR/USD hit 1.3024 during European morning trade, the session low; the pair subsequently consolidated at 1.3031, slipping 0.15%.
The pair was likely to find support at 1.3009, Tuesday’s low and resistance at 1.3146, the high of February 27.
The ECB was widely expected to leave rates on hold at 0.75% on Thursday, but concerns over the economic outlook for the region fuelled speculation over the prospect of future rate cuts.
Data on Wednesday confirmed that the euro zone economy contracted by 0.6% in the fourth quarter, in line with expectations and economists’ forecasts.
Meanwhile, wariness over political uncertainty in Italy lingered amid reports that Italian President Giorgio Napolitano is considering appointing a technocratic government after elections last month ended in a stalemate.
The euro edged higher against the pound, with EUR/GBP easing up 0.11% to 0.8637.
Sterling remained under pressure ahead of the outcome of the Bank of England’s policy meeting on Thursday, amid speculation over whether the bank will resume its asset purchase program.
The U.S. was to publish a report on ADP nonfarm payrolls and official data on factory orders later in the trading day.
