The euro came under pressure following comments from the head of the European Central Bank suggesting it will stick to its loose monetary policy for now, disappointing those who had hoped for some form of tightening at its June meeting.
Mario Draghi said the ECB was “firmly convinced” it must maintain its interventions in the eurozone economy to avoid undermining a gathering recovery.
The bank’s interest rates are at historic lows, while the ECB buys tens of billions of euros in bonds each month to pump cash into the financial system.
Stephen Innes, senior trader at OANDA, said: “The euro was trading a tad dark as Draghi’s latest comments suggest the EU still needs stimulus, sounding much less hawkish than the market lean.”
The pound was also struggling as Prime Minister Theresa May’s ruling Conservatives saw their opinion poll lead narrow further against the opposition Labour Party.
Sterling had soared in recent weeks on the prospect May would win a landslide in the June 8 poll, giving her a stronger hand in Brexit talks. But the currency has fallen with the government’s poll numbers on fears Britain could end up with a bad EU exit deal.
Attention will be on the release Friday of US jobs data, which will give investors a better handle on the Federal Reserve’s plans for raising interest rates, with its next policy meeting later this month.
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