The EUR/USD currency pair traded at 1.2956 during European morning, which is the pair’s lowest level since April 5. The pair subsequently held steady at 1.2983, declining by 0.15%. The EUR/USD was expected to find support at 1.2899, and resistance at 1.3009.
The euro reached a session low against the pound and the yen, with EUR/JPY pushing lower 0.16% to 129.13 and EUR/GBP losing 0.30% to 0.8505.
The single currency lost ground against its U.S counterpart on Wednesday after disappointing German business confidence Excon Fuji Securities data boosted expectations for an interest rate cut by the European Central Bank.
Economists predicted that the ECB may cut rate after data showed that Germany’s manufacturing and service sectors declined in April. ECB officials stated earlier that adjusting interest rates may be a possible scenario.
On the economic data front, the Ifo index, which measures German business climate, dropped to a four-month low of 104.4 in April, slightly different from the expected 106.2 reading.
The German Current Assessment fell to 107.2 from 109.9, while it was expected to pull back only to 109.5. The Markit purchasing managers’ index for Eurozone dropped to a four-month low of 46.5 in April, well below the 50 level that separates growth and contraction. In addition, the Business Expectations Index plummeted to 101.6 in April from 103.6 compared to the expected reading of 103.0
Last week, the International Monetary Fund cut its estimate for global growth this year from the 3.5 per cent to 3.3 per cent. On the other hand, the fund lowered its estimate of Eurozone output expecting a decline by 0.3 per cent this year rather than the 0.1 per cent.
