The euro fell to a one-week low against the greenback on Wednesday, a day before the European Central Bank is expected to add further stimulus in a bid to boost the region's economy.
ECB policymakers are leaning toward a package that includes a rate cut, a beefed-up pledge to keep rates low for longer and compensation for banks over the side-effects of negative rates, five sources familiar with the discussion said last week.
Many also favor restarting asset buys, but opposition from some northern European countries is complicating this issue.
"The mere thought of easing is probably keeping the euro on the defensive at the moment," said Shaun Osborne, chief currency strategist at Scotiabank in Toronto. However, "we're not completely on side with expectations of an aggressive ease we think there may be a rebound in the euro after the policy meeting tomorrow."
The euro was last down 0.43% on the day at $1.0995.
The yen was the weakest since Aug. 1 as optimism over US-China trade talks boosted risk sentiment and reduced demand for safe havens.
China announced its first batch of tariff exemptions for 16 types of US products, days ahead of a planned meeting between the two countries to try and de-escalate their bruising tariff row.
The dollar gained 0.20% to 107.74 yen.
The British pound fell 0.19% to $1.2322.
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