Investing.com - The euro gave up all of the day’s gains against the dollar on Monday, falling back towards seven-month lows amid growing expectations that the European Central Bank will cut interest rates deeper into negative territory in December.
EUR/USD was last at 1.0736, not far from the low of 1.0701 set on Friday, after rising to highs of 1.0790 earlier.
The drop in the euro came after Reuters reported that the ECB could cut its deposit rate deeper into negative territory at its December meeting.
The ECB lowered its deposit rate to minus 0.2% in September 2014.
In October ECB President Mario Draghi indicated that the bank could enlarge its monetary stimulus program next month to combat persistently low levels of inflation in the single currency bloc.
The euro had gained ground earlier in the session as investors took profits after Friday’s rally in the greenback.
Elsewhere in the euro zone, the Eurogroup of finance ministers were holding talks in Brussels to discuss the condition of the euro zone economy and Greece’s bailout.
Ahead of the talks Eurogroup head Jeroen Dijsselbloem said progress has been made in recent weeks regarding Greece’s banks and reform programs. But he added that more work must be done in the next two weeks before Athens can receive its next €2 billion tranche of aid.
Demand for the dollar continued to be underpinned after Friday’s robust U.S. jobs data paved the way for the Federal Reserve to raise interest rates at its December meeting.
The U.S. economy added 271,000 jobs last month the Labor Department said, well ahead of the 180,000 expected by economists and the largest increase since December.
The unemployment rate fell to a seven-and-a-half year low of 5.0%.
The unexpectedly strong report underlined the diverging monetary policy expectations between the Fed and other world central banks.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last at 99.26, holding just below Friday’s peaks of 99.29, the highest level since mid-April.
USD/JPY was at 123.32, easing off earlier highs of 123.59, the most since August 20.
EUR/JPY was last at 132.35, after rising as high as 133.18 earlier.