The euro fell sharply today as surprisingly weak euro zone service-sector data increased pressure on the European Central Bank to cut interest rates to shore up growth.
The euro fell 1 per cent against the dollar after figures showed that the service sector growth across the 15-nation bloc slowed in January to its slowest rate in four-and-a-half years.
Some countries such as Germany, Spain and Italy registered contraction.
The ECB meets to set interest rates on Thursday, and is widely expected to keep them on hold at 4 per cent.
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But investors and analysts believe the services sector data can only force the bank to soften its tough stand on inflation and bring forward its first rate cut.