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Forex - EUR/USD falls to fresh 7-month lows ahead of ECB meeting

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Investing.com -

Investing.com - The euro fell to fresh seven-month lows against the U.S. dollar on Monday, as investors remained cautious ahead of the European Central Bank's policy meeting this week, while talk of a U.S. rate hike boosted the greenback.

EUR/USD hit 1.0563 during U.S. morning trade, the pair's lowest since April 14; the pair subsequently consolidated at 1.0578, easing 0.13%.

The pair was likely to find support at 1.0528, the low of April 14 and resistance at 1.0640, Friday's high.

Sentiment on the euro remained vulnerable as ECB President Mario Draghi has been signaling in recent weeks that the bank is ready to act quickly to boost inflation in the euro zone and can also change the level of its deposit rate to boost the impact of quantitative easing.

Earlier Monday, data showed that German retail sales fell 0.4% in October, compared to expectations for a 0.4% rise and after a flat reading the previous month.

In addition, a preliminary report showed that German consumer prices rose 0.1% in November, in line with expectations, after a flat reading in October.

In the U.S., the National Association of Realtors said its pending home sales index inched up 0.2% last month, disappointing expectations for a gain of 1.5%.

Pending home sales in September fell by 1.6%, whose figure was revised from a previously reported drop of 2.3%.

The report came shortly after market research group Kingsbury International said its Chicago purchasing managers' index tumbled by 7.5 points to 48.7 this month from a reading of 56.2 in October. Analysts had expected the index to fall 2.2 points to 54.0 in November.

The dollar remained broadly supported by growing expectations that the Federal Reserve will raise interest rates next month.

The euro was also lower against the pound, with EUR/GBP down 0.18% at 0.7033.

In the U.K., official data earlier showed that net lending to individuals rose by £4.8 billion in October, in line with expectations and after a £4.9 billion increase the previous month.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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