The single European currency revealed some signs of nervousness over the weekend and into Monday after the European Central Bank was expected to announce stimulus packages when it meets later in the week.
It is now widely expected among forex traders that the Bank will confirm plans for wide-ranging monetary policy stimulation on Thursday, although this has not yet been confirmed.
The rumours come in the wake of a number of problems in the Eurozone, such as decreased economic activity in Germany.
According to some analysts, there may even be a rate cut in addition to the stimulus package – with some expecting to see a decline of 20 basis points.
Overall, it is believed there is a 72% chance of this rate cut happening.
The euro did not respond well to suggestions that this kind of stimulus was on the cards.
It held against the dollar this morning as trading got underway, but this belied a poor performance earlier in the day.
It had gone down to $1.10155 over the course of the night, which represented its worst performance since early September.
Elsewhere around the world, the US dollar index, which monitors how the greenback is performing in comparison to six other currencies from around the world, showed no signs of rising from its stagnant position of 98.438.
This came in part due to renewed speculation that the US Federal Reserve was also going to be seeking to cut rates soon.
A speech in Switzerland last Friday from Jerome Powell, who heads up the Fed, said that the central bank would act in what he described as “appropriate” ways to ensure the US didn’t lose any economic growth – suggesting that rate cuts could well be on the way.
The Federal Reserve next meets in the middle of September, on the 18th.
In the UK, the British pound did not manage to sustain its positive performance of recent days after nerves crept in about Britain’s political situation.
While the pound rose last week due to the approval of legislation which prohibited the country from leaving the European Union without a deal on 31st October, there is now some concern that if a general election occurs then the legislation could be changed – depending on the winner.
There is added instability at work too. The general election may not happen after all – or at least not on Boris Johnson’s own preferred timescale.
The pound went down by 0.4% over the course of the start of trading in its pair with the US dollar.
It was recorded at $1.2235 at one stage.
In Australia, the local dollar went up to its best performing position in over a month in its pair with the US dollar.
It reached a five-week high point of 0.68625 on the assumption that the Chinese yuan – with which it has a deep connection due to the nature of its trading relationship – would be able to contend with trade dispute issues in the future.