- The euro fell to two-and-a-half month lows against the dollar on Thursday after data showing that the French economy stagnated in the first three months of the year added to pressure on the European Central Bank to ease monetary policy.

EUR/USD hit 1.3660, the lowest level since February 27 and was last down 0.34% to 1.3667.

The pair was likely to find support at 1.3600 and resistance at 1.3722, the session high.

Official data showed that French gross domestic product was flat in the first quarter, disappointing expectations for growth of 0.2%, as consumer spending slumped 0.5%.

The data overshadowed a report showing that the German economy, the euro zone''s largest, expanded 0.8% in the three months to March, beating expectations of 0.7%.

Elsewhere, data showed that Italy’s economy contracted 0.1%, compared to expectations for growth of 0.2%.

The euro zone was to release preliminary data on first quarter growth later in the session, as well as revised data on consumer price inflation for April.

Meanwhile, comments from a senior EBC official fuelled speculation that the bank is preparing to act at its next meeting in June to shore up the recovery in the currency bloc and stop inflation from falling too low.

In an interview with The Wall Street Journal on Thursday, ECB Vice President Vitor Constancio said the central bank was open to more monetary easing and was determined to act swiftly if required.

The euro was also at two-and-a-half month lows against the yen, with EUR/JPY down 0.35% to 139.23.

Elsewhere, the single currency was weaker against sterling, with EUR/GBP down 0.23% to 0.8159, not far from the 16-month trough of 0.8126 reached on Wednesday.

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