Investing.com - The euro was trading at fresh one year lows against the dollar on Tuesday as uncertainty over whether the European Central Bank will announce fresh easing measures at its upcoming policy meeting on Thursday continued to weigh on the single currency.
EUR/USD touched lows of 1.3115, the weakest level since September 6 2013 and was last at 1.3120.
The pair was likely to find support at the 1.31 level and resistance at around 1.3150.
The euro has come under heavy selling pressure amid mounting expectations that the ECB will implement fresh measures as a way to shore up long term inflation expectations after data last week showed that the annual rate of euro zone inflation slowed to a five year low of 0.3% last month.
Concerns that sanctions against Russia would act as a drag on growth in the euro zone also continued to pressure the single currency lower.
Over the weekend European Union leaders threatened to impose a new round of sanctions on Russia if Moscow does not scale back its involvement in the conflict in eastern Ukraine.
Data on Monday confirmed that the German economy contracted 0.2% in the second quarter, while separate reports pointed to a slowdown in euro area factory activity, reinforcing concerns that the recovery in the region is losing momentum.
Elsewhere Tuesday, the dollar advanced to seven month highs against the yen, with USD/JPY climbing 0.47% to 104.83.
The dollar was boosted by weakness in the euro and by gains in Asian equities markets overnight, which curbed investor demand for the safe haven yen.
The euro was also higher against the yen, with EUR/JPY rising 0.44% to 137.59.