The euro gained 0.15% to $1.26 this afternoon as the International Monetary Fund lowered its previous growth forecasts for the US to 2% this year.
The dollar index fell on this news as investors are anticipating the Fed will go ahead with another round of QE at its meeting scheduled for the end of July. Meanwhile, the euro fell earlier today as investors geared up for the European Central Bank's rate decision on Thursday after a spate of weak manufacturing data releases yesterday. The ECB is widely expected to cut rates by 0.25% to 0.75%, although a cut of 0.5% should not come as a great surprise. EUR/USD appeared to encounter some resistance at the $1.2675 level, while it had some short-term support at $1.2370.