Euro plummets to new 11-year low ahead of ECB rate decision

Euro plunged to a new 11-year low on Thursday after German factory orders data disappointed even as traders awaited the European Central Bank rate decision scheduled later in the day.

EUR/USD fell to 1.1028, its lowest since September 2003, from the previous close of 1.1075. The pair has fallen 1.45% so far this week adding to the 1.8% loss over the last two weeks.

German factory orders fell 3.9% month-on-month in January, after rising 4.4% in December and compared to the market consensus of a decline of just 1%.

Another data showed that the French ILO unemployment rate rose to 10.4% in the fourth quarter from 10.3% in Q3.

The ECB is scheduled to announce a monetary policy at 12.45pm GMT and the bank president Mario Draghi will address the press at 1.30pm.

The central bank is not expected to alter the main rates at this meeting as it has only recently announced the larger than expected bond buyback scheme, weighing heavily on the single currency. That said, remarks by Draghi will be keenly watched for the future rate path.

The dollar, has started rising again, after a lull that was caused by a set of weak data points, adding to the euro's weakness.

The USD index, the gauge that measures the strength of the greenback against a trade-weighted basket of six major currencies, has risen to a 11-year high of 96.28 on Thursday, from the previous close of 95.94.

After three weeks of losses, the index started rising in the week to 20 February, by now, it has rallied 2.3%. It was this week the USD gauge that has broken through the January peak of 95.47 to a new multi-year high.