The euro dropped against its most major opponents in the European session on Wednesday, as investors look forward to the European Central Bank's rate setting meeting on Thursday, with policymakers widely expected to signal no change in policy.

Economists expect the bank to keep the main refi rate at a record low of zero percent and the deposit rate at -0.40 percent. The marginal lending facility rate is expected to be retained at 0.25 percent.

The ECB is also expected to refrain from giving any hints about the future of QE program, which ends in September.

Investors fretted over higher bond yields, which was buoyed by expectations of more Fed rate hikes this year.

The U.S. 10-year treasury yield climbed above 3 percent on expectations that accelerating inflation could put pressure on the Fed for more Fed rate hikes this year.

Figures from Destatis showed that Germany's construction orders grew notably in February.

New orders in the main construction industry climbed 9.9 percent month-over-month in February. Orders surged 13.0 percent in February from a year earlier.

The currency showed mixed trading against its major rivals in the Asian session. While it rose against the franc and the yen, it held steady against the franc. Against the greenback, it declined.

The euro edged down to 132.91 against the yen, from a high of 133.34 hit at 2:45 am ET. The euro is poised to challenge support around the 130.00 mark.

Data from the Ministry of Economy, Trade and Industry showed that Japan's all industry activity rebounded at a slower-than-expected pace in February.

The all industry activity index rose 0.4 percent month-over-month in February, reversing a 0.1 percent drop in January. That was just below the expected increase of 0.5 percent.

The 19-nation currency declined to 1.2175 against the greenback, its weakest since March 1. The euro is seen challenging support around the 1.20 area.

The euro that closed Tuesday's trading at 0.8750 against the pound dropped to a 5-day low of 0.8736. If the euro continues its decline, 0.86 is possibly seen as its next support level.

On the flip side, the euro hovered around a 5-day high of 1.1997 against the franc, compared to 1.1973 hit late New York Tuesday. Next key resistance for the euro is likely seen around the 1.22 level.

Survey data from the investment bank Credit Suisse and the CFA Society Switzerland showed that Switzerland's investor confidence deteriorated further in April.

The Credit Suisse CFA Society Switzerland Indicator that reflects expectations of financial analysts for the economy in the coming six months, fell to 7.2 points from 16.7 in March. This was the lowest since October 2016.

Looking ahead, at 4:15 pm ET, the Bank of Canada Governor Stephen Poloz testifies along with Senior Deputy Governor Carolyn Wilkins before the Standing Senate Committee on Banking, Trade and Commerce, in Ottawa.

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