Investing.com - The euro remained lower against the broadly stronger dollar on Tuesday amid expectations that the Federal Reserve will continue to scale back stimulus measures at next week’s policy meeting.
EUR/USD hit session lows of 1.3516 and was last down 0.16% to 1.3530.
The pair is likely to find support at 1.3506, Monday’s low and a two-month low and near-term resistance at 1.3567, Monday’s high.
Demand for the dollar continued to be underpinned by expectations for a reduction to the Fed’s quantitative easing program at the outcome of its next policy meeting on January 29 to USD65 billion from the current USD75 billion.
In the euro zone, data released on Tuesday showed that the ZEW index of German economic sentiment ticked down to 61.7 this month from 62.0 in December. Analysts had expected an increase to 64.0.
The current conditions index rose to a 20-month high of 41.2 from 32.4 in December, beating expectations for an increase to 34.1.
Meanwhile, the International Monetary Fund raised its forecast for global economic growth on Tuesday, but warned that the pace of the recovery will remain “weak and uneven”.
The IMF said it expects the global economy to grow by 3.7% in 2014, which in October it said would expand by 3.6% this year.
The fund said it expects the euro zone economy to emerge from contraction to expand by 1% this year, saying “the euro area is turning a corner from recession to recovery." It highlighted the risk of deflation in the euro area and reiterated that the recovery would be slower in some countries.
The common currency fell to one-year lows against the pound, with EUR/GBP down 0.36% to 0.8219.
Sterling found support after the IMF upgraded Britain’s growth forecast to 2.4% in 2014, more than any other country, while its forecast for growth in 2015 was raised to 2.2%.
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