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Euro Becomes Worst-Performing Major Currency

The euro is the world’s worst-performing major currency over the past month with traders bracing for the European Central Bank’s decision on whether to expand stimulus, Bloomberg reports.

The single currency has depreciated close to 3 percent against the greenback since Feb. 10 as economists forecast the ECB on Thursday will cut its deposit rate from minus 0.3 percent and step up its 60 billion-euro ($66 billion) monthly bond-buying program.

While speculators have recently added to bets that the euro will weaken, bearish positions are less than half what they were at the start of the year. New Zealand’s dollar tumbled after the Reserve Bank unexpectedly lowered interest rates.

“The ECB will probably leave itself room for more asset buying and deeper cuts into the negative to avoid giving the impression it’s done with the easing,” said Yuji Saito, head of the foreign-exchange department at Credit Agricole SA in Tokyo, who expects a reduction to the deposit rate and the duration of the stimulus plan to be extended. “Markets are likely to respond in straightforward fashion with euro selling.”