Investing.com - The euro weakened against the dollar on Tuesday after investors sold the currency and jumped to the sidelines to await the European Central Bank's decision on interest rates and monetary policy later this week.
In U.S. trading, EUR/USD was down 0.67% at 1.2387, up from a session low of 1.2386 and off a high of 1.2507.
The pair was likely to find support at 1.2357, the low from Nov. 24, and resistance at 1.2507, Monday's high.
The European Central Bank will announce its latest decision on monetary policy this Thursday, and investors avoided the euro ahead of time on uncertainty as to whether monetary authorities will announce fresh stimulus measures.
Data released last Friday revealed that the annual rate of euro area inflation slowed to a five-year low of 0.3% last month from 0.4% in October.
Sentiment on the single currency also remained vulnerable after data on Monday showed that the euro zone’s manufacturing purchasing managers' index slowed to 50.1 from a preliminary reading of 50.4 last month, just barely above the 50 level separating growth from contraction.
The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets are keeping a close eye out for plans to announce purchases of government debt, a stimulus tool known as quantitative easing that weakens paper currencies by suppressing interest rates.
Elsewhere on Tuesday, Spain reported that the number of unemployed people declined by 14,700 in November, compared to expectations for an increase of 57,300, after a 79,200 rise in October.
Elsewhere, the euro was down against the pound, with EUR/GBP down 0.10% at 0.7919, and down against the yen, with EUR/JPY down 0.02% at 147.59.
On Wednesday, the euro zone is to release data on retail sales.
The U.S. is to release the ADP report on private-sector job creation as well as industry data on service-sector activity.