Investing.com - The euro trimmed losses against the dollar on Monday after falling to its lowest levels in seven months overnight as upbeat euro zone private sector survey data lent support, but expectations for more monetary easing continued to weigh.
EUR/USD was last at 1.0631, off 0.13% for the day after falling to lows of 1.0600 earlier, the weakest since April 15.
The single currency found some support after data showing that growth in the euro area private sector picked up at the fastest rate since May 2011 this month.
The euro zone composite purchasing managers’ index, which measures activity in the manufacturing and service sectors, rose to 54.4 from 53.9 in October.
The strongest growth was seen in the euro zone periphery, rather than its two largest economies.
Growth in France’s private sector fell to lowest level in three months, with service sector activity in particular hit by the terror attacks in Paris.
This was offset by acceleration in Germany’s private sector, with growth picking up to a three-month high this month.
The euro edged higher against the yen, with EUR/JPY inching up to 130.91, off the seven-month trough of 130.56 hit overnight.
The yen was slightly weaker, with markets in Japan closed for a holiday on Monday.
But the euro remained under pressure amid heightened expectations that the European Central Bank will scale up its monetary easing program next month.
On Friday, ECB head Mario Draghi gave the clearest signal yet that the bank may unveil fresh stimulus measures at its December meeting.
The ECB is ready to act quickly to boost inflation in the euro zone, Draghi said.
The comments underlined the diverging monetary policy expectations between the Federal Reserve and the ECB.
The U.S. central bank is widely expected to hike interest rates for the first time in almost a decade at its December meeting.
Higher U.S. interest rates would make the dollar more attractive to yield-seeking investors.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit seven-month highs of 100.04 early Monday and was last at 99.87.