The US dollar rose against the euro on Tuesday after data showed Germany's economy slowed in 2018, and sterling slipped ahead of a parliamentary vote on the United Kingdom's withdrawal from the European Union.
Growth in Europe's largest economy slowed to 1.5 percent in 2018, the German government reported on Tuesday. That was the slowest rate of GDP growth in five years. Investors are also worried about slower growth around the world due to trade disputes driven by US President Donald Trump's policies.
Against the dollar, the euro dropped to a five-day low of $1.141 after the data was released. In mid-morning trade, the single currency had retraced some of its losses, and was last at $1.144.
Investors are also closely watching sterling with British Prime Minister Theresa May widely expected to lose a vote in parliament later Tuesday on her Brexit deal.
"The market is anticipating the UK parliamentary vote on the withdrawal agreement," said Shahab Jalinoos, head of foreign exchange strategy at Credit Suisse in New York. "The vote is obviously essential to Sterling, but the event is big enough to draw global attention."
Other analysts expect the pound will take a major beating if May loses the vote by a wide margin since it could push Britain closer to a chaotic exit from the EU.
Sterling traded down 0.33 percent against the dollar at $1.282 ahead of the vote but remained close to a two-month high hit on Monday of $1.293.
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