The euro slumped to a four-month low against the pound sterling. EUR/CHF and EUR/JPY also slipped.

The euro is losing steam ahead of tomorrow's ECB interest rate announcement. EUR/USD climbed around 0.4% in conjunction with the depreciation of the US dollar in today's New York session (January 24), but EUR/GBP slumped to a four-month record low. EUR/CHF and EUR/JPY are also sluggish.

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Some of the latest Eurozone economic data has been rather disappointing. The Eurozone Consumer Confidence Index collapsed from +15.0 in December to -16.0 in January, whereas the consensus only anticipated a drop to -14.3.

Today's Purchasing Managers' Index (PMI) publication displayed a less than conducive situation for the Eurozone's manufacturing and services sectors. Despite an improvement in the Eurozone Manufacturing PMI, the figure is still below the 50.0 threshold - signaling continued contraction -. The Eurozone Services PMI score was also lackluster, slipping from 48.8 to 48.4. Whereas the consensus had expected the Services PMI to improve slightly to 49.0.

Market participants next highlighted the European Central Bank (ECB) meeting and interest rate announcement in Thursday's European session. The majority believe the ECB will not change its current policy, so markets will monitor if ECB officials whisper signals for a rate cut in the coming months.

The price sub-index in the Eurozone PMI report is still rising, so some experts think the ECB will refute market speculation about a rate cut starting in April. However, most market participants expect ECB rates to fall in the second quarter.

"The eurozone economy continues to trend around 0% growth and there are no signs of any imminent recovery. Price pressures are still increasing for the service sector, which provides another argument for the ECB not to hike before June," says Bert Colijn, Senior Economist at ING Bank.