EUR/USD (a 4-hour chart)
The euro weakened on Wednesday after Bundesbank President Jens Weidmann said about the possibility of lowering interest rates in the euro area to support a sluggish economic growth.
The single currency has increased the previously incurred losses and fell below 1.31 dollars on the Weidmann's report. In an interview with Wall Street Journal, he said that the ECB may cut interest rates if economic indicators and inflation data indicate the need for such measures.
The deterioration in investor sentiment due to massive sales in most financial markets also had a negative impact on the euro. Weaker economies of peripheral European countries are still struggling to overcome the painful recession, and traders expect the European Central Bank decides to lower interest rates in the coming months in order to facilitate access to credit.