Euro hesitant before ECB rate decision

The euro languished near two-week lows against the dollar and yen today as the market expected the European Central Bank (ECB…

The euro languished near two-week lows against the dollar and yen today as the market expected the European Central Bank (ECB) to deliver a boost to euro zone's sluggish growth.

A soaring euro, falling inflation and the region's stagnant economy raised speculation the ECB would cut rates, currently at 2.5 per cent, by 50 basis points.

But the single currency has already been losing sparkle, coming off more than three US cents from its record high of $1.1932 set only last week.

The euro had fallen to $1.1630 before recovering to $1.1670 this morning.

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The euro has gained more than 11 per cent this year as investors poured funds into liquid and higher yielding euro zone bonds as an alternative to US assets.