he euro fell to one-month lows against the dollar on Thursday and was
trading close to 14-month lows against the pound after the European
Central Bank reinforced its forward guidance on rates, saying monetary
policy will remain accommodative for as long as necessary.
The pair was likely to find support at 1.3525 and resistance at 1.3656, the session high.
The drop in the euro came after ECB President Mario Draghi “strongly” reiterated that monetary policy will remain accommodative for as long as is needed in order to assist the economic recovery in the euro area.
The ECB expects interest rates to remain at present or lower levels for an extended period of time, he said.
Draghi said the ECB was ready to take "further decisive action" if there was unwarranted short term tightening in the money markets, or if the outlook for inflation worsened in the medium term. The ECB would consider "all possible instruments" to tackle these contingencies, he added.
The euro area may experience a prolonged period of low inflation, before inflation rises back towards the ECB's target of close to, but below 2% Draghi said. The bank expects inflation to remain around current levels during the coming months.
Draghi said the slowdown in the annual rate of euro zone inflation in December was generally expected, and was due, in part, to changes in German data Share Tips
The comments came after the ECB left interest rates on hold at 0.25%, in a widely anticipated decision. The bank also held its marginal lending rate at 0.75% and kept its deposit facility rate unchanged at zero.
EUR/GBP fell to lows of 0.8231, the lowest since November 2013, and was last down 0.04% to 0.8250.
Elsewhere, the shared currency trimmed gains against the yen, with EUR/JPY up 0.12% to 142.54, down from session highs of 143.04. Financial Astrology
In the U.S., the Labor Department said Thursday the number of people who filed for unemployment assistance last week fell by 15,000 to 330,000 from the previous week’s revised total of 345,000.
Economists had expected jobless claims to decline by 10,000.
Euro turns lower after Draghi reiterates guidance on rates
EUR/USD fell to lows of 1.3549, the weakest level since December 5 and was last up just 0.03% to 1.3580.The pair was likely to find support at 1.3525 and resistance at 1.3656, the session high.
The drop in the euro came after ECB President Mario Draghi “strongly” reiterated that monetary policy will remain accommodative for as long as is needed in order to assist the economic recovery in the euro area.
The ECB expects interest rates to remain at present or lower levels for an extended period of time, he said.
Draghi said the ECB was ready to take "further decisive action" if there was unwarranted short term tightening in the money markets, or if the outlook for inflation worsened in the medium term. The ECB would consider "all possible instruments" to tackle these contingencies, he added.
The euro area may experience a prolonged period of low inflation, before inflation rises back towards the ECB's target of close to, but below 2% Draghi said. The bank expects inflation to remain around current levels during the coming months.
Draghi said the slowdown in the annual rate of euro zone inflation in December was generally expected, and was due, in part, to changes in German data Share Tips
The comments came after the ECB left interest rates on hold at 0.25%, in a widely anticipated decision. The bank also held its marginal lending rate at 0.75% and kept its deposit facility rate unchanged at zero.
EUR/GBP fell to lows of 0.8231, the lowest since November 2013, and was last down 0.04% to 0.8250.
Elsewhere, the shared currency trimmed gains against the yen, with EUR/JPY up 0.12% to 142.54, down from session highs of 143.04. Financial Astrology
In the U.S., the Labor Department said Thursday the number of people who filed for unemployment assistance last week fell by 15,000 to 330,000 from the previous week’s revised total of 345,000.
Economists had expected jobless claims to decline by 10,000.
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