Euro drops against dollar before Germany's ZEW survey

• The euro traded down 0.1pc at $1.0826, close to its lowest since April 2017.
• The Australian dollar fell 0.5pc to 0.6681 against the U.S. dollar, a one-week low.
• Norway's crown plunged to a 19-year low of 9.3195 against the U.S. dollar.

LONDON: The euro weakened on Tuesday, close to the three-year low it fell to on Monday, before a German survey that's expected to show a slump in investor confidence and fuel growing pessimism about the outlook for Europe's largest economy.

The euro has lost 3.4pc of its value against the U.S. dollar so far this year, after weak manufacturing and gross domestic product data from Germany suggested the euro zone is more vulnerable than previously thought, while the U.S. economy proved more resilient than the rest of the world.

The euro traded down 0.1pc at $1.0826, close to its lowest since April 2017.

"Breaking the EUR/USD 1.0800 level seems to be a question of when rather than if," said Petr Krpata, chief currency strategist at ING.

"The mix of soft euro zone data, the market pricing renewed ECB deposit rate cuts and attractive euro funding characteristics do not bode well for the" euro.

Poor economic data in the euro area raised concerns that euro zone monetary policy will have to remain looser for longer.

The euro's next hurdle is the release of Germany's ZEW survey at 1000 GMT. It's forecast to show economic sentiment slipped from the highest since July 2015.

Minutes from the Reserve Bank of Australia's first meeting of the year similarly fuelled expectations of lower interest rates.

The RBA left rates at a record low of 0.75pc at that meeting, but the minutes showed it was prepared to ease policy further if needed.

The Australian dollar fell 0.5pc to 0.6681 against the U.S. dollar, a one-week low.

The Aussie has also been buffeted by the coronavirus because of Australia's extensive trade ties with China.

Norway's crown plunged to a 19-year low of 9.3195 against the U.S. dollar.

The British pound fell 0.2pc to $1.2979 and by 0.1pc to 83.41 pence against the euro as Britain and the European Union laid out conflicting views on how to proceed with trade negotiations.

Prime Minister Boris Johnson's Europe adviser, David Frost, said on Monday Britain would not be threatened into following EU rules to win a free-trade agreement with the bloc.

Frost's comments contrasted with those of European Commission President Ursula von der Leyen, who has called on Britain to guarantee fair competition based on ambitious environmental and labour standards.