The euro has fallen ahead of this week's decision by the European Central Bank (ECB) on interest rates.

This morning one euro was worth $1.2734 and £0.6829 and one US dollar stood at £0.5363.

The euro dropped against the dollar and the yen as the ECB is expected to up interest rates to counter inflation in the eurozone.

However, gains are not expected to be great if an interest rate move is made.

Ashley Davies, currency strategist at UBS AG in Singapore, told Bloomberg: "The market has already priced in an interest-rate increase by the ECB, so the euro won't benefit from rate support."

So far this year, interest rate increases in Europe have led the currency up 7.5 per cent.

This week will also see new data released on manufacturing and services performance in Europe, which is expected to show growth at its highest rate since 2000.