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Euro's Weakest Level: The euro (EUR) has been trading at around $1.07, marking its weakest level in three months. Investors are exercising caution ahead of the highly anticipated ECB meeting scheduled for Thursday.

ECB Inflation Expectations: A Reuters report has suggested that the ECB anticipates inflation to remain above 3% next year. This has raised market expectations of an ECB interest rate hike during this week's meeting, despite signs of economic weakness in the Eurozone.

Rate Hike Expectations: Market pricing now reflects a nearly 75% likelihood that the ECB will raise interest rates by 25 basis points. This is a notable increase from approximately 40% earlier in the week and just 25% a week ago.

European Commission's Growth Forecasts: The European Commission has adjusted its growth forecasts for the Euro Area. It now projects a growth rate of 0.8% for 2023 and a growth rate of 1.3% for 2024. These forecasts are lower than the previously expected growth rates of 1.1% and 1.6%, respectively, as indicated in May.

Inflation Projections: Regarding inflation, the European Commission's projection for 2023 stands at 5.6%, slightly below the May forecast of 5.8%. However, the inflation forecast for 2024 has been marginally revised upward to 2.9% from 2.8%.

Consumer Demand Impact: The European Commission attributes the downward revision in economic growth forecasts to weak domestic demand, particularly in consumption. High and increasing consumer prices for most goods and services are seen as having a more significant negative impact than expected in previous forecasts.

Germany's Recession: The report notes that the largest Eurozone economy, Germany, is expected to slip into recession in the current year, contributing to the overall economic challenges faced by the region.