Investing.com - The euro slid lower against the dollar and the yen on Monday as data showing that Japan’s economy unexpectedly fell into recession in the third quarter weighed on market sentiment.
EUR/USD was down 0.25% to 1.2495, off the highs of 1.2576 struck overnight.
Data on Monday showed that Japan’s economy contracted by an annualized 1.6% in the third quarter, following a 7.3% decline in the previous quarter. Economists had forecast a 2.3% increase.
The unexpectedly weak data added to gloom over the outlook for the global economy.
Japanese Prime Minister Shinzo Abe was expected to postpone a planned sales tax increase due to come into effect next year after a sales tax hike in April of this year acted as a drag on growth.
The prime minister was also expected to call for snap elections which could take place as soon as next month.
USD/JPY initially hit seven year highs of 117.04 following the release of the GDP data, before retracing gains to trade at 116.10, off 0.27% for the day.
The yen was also higher against the euro, with EUR/JPY sliding 0.44% to 145.01, off the six-year highs of 146.51 struck earlier in the session.
The US dollar index, which tracks the performance of the greenback against a basket of six major currencies, was up 0.19% to 87.78, not far from Friday’s more than four-year highs of 88.36.