The euro depreciated to below $1.08, marking its lowest point in nearly three months driven by investor expectations that the European Central Bank may maintain its current interest rates at the upcoming meeting due to the underwhelming performance of businesses and the slowdown in core inflation.
ECB's Chief Economist, Philip Lane, acknowledged that the inflation of goods and services has moderated, and he anticipates a slowdown in core inflation in the forthcoming months.
However, during a recent speech in London, ECB President Christine Lagarde refrained from explicitly stating whether the bank intends to raise or maintain interest rates.
On the data front, the latest CPI report showed core inflation rate in the Euro Area slowed to 5.3% in August from 5.5% in July.
Meanwhile, PMI data showed private sector activity in the region contracted for the third consecutive month and by the most in nearly three years.