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The euro is trading at $1.3065, down 0.1%, after the latest services PMI report came in at 47.2 confirming that the sector is still in contraction as it is below 50.0. Economists were expecting a reading of 47.5, but Brussels confirmed that the eurozone contracted by 0.2% in the first quarter of 2013. This weak economic state caused dealers to sell the euro versus the US dollar.
Tonight (London time) the US will announce the latest Beige Book update. There has been speculation that it the country will taper back its quantitative easing programme if the economy shows signs of recovery. It is far from its pre-credit crisis levels of growth, but if there are any comments regarding reducing the bond-buying scheme we could see traders sell the euro and buy the US dollar.
Tomorrow the European Central Bank will announce their interest rate decision. Traders are expecting rates to remain the same at 0.5%, but if there are any hints of future rates cuts we could see the euro decline further.