Forex - EUR/USD trims losses after ECB holds, Draghi ahead

Investing.com

Published Apr 04, 2013 07:57AM ET

 Forex - EUR/USD trims losses after ECB holds, Draghi ahead

Investing.com - The euro trimmed losses against the dollar on Thursday after the European Central Bank announced no change to monetary policy as investors awaited comments by President Mario Draghi at the bank’s post policy meeting press conference.

EUR/USD pulled back from 1.2784, the pair’s lowest since Monday, to hit 1.2811 during European afternoon trade, still down 0.30% for the day.

The pair was likely to find support at 1.2750, the low of March 27 and a four-month trough and resistance at 1.2852, the session high.

The ECB left interest rates on hold at 0.75% in a widely expected decision.

Sentiment on the single currency remained fragile amid concerns that Draghi could indicate that the bank is considering a rate cut or other possible policy measures amid concerns over the deteriorating economic outlook for the currency bloc.

Worries over the possible implications of a bailout deal for Cyprus also weighed.

The euro was lower against the pound, with EUR/GBP sliding 0.20% to 0.8473.

Sterling found support after the Bank of England left interest rates on hold at 0.5% and the size of its asset purchase program unchanged at GBP375 million in a widely expected decision.

The decision came on the heels of data showing that the U.K. service sector expanded at the fastest pace in seven months in March, fuelling hopes that the economy will narrowly avoid a triple-dip recession.

The single currency extended its rally against the broadly weaker yen, with EUR/JPY surging 2.32% to 122.26.

The yen fell across the board on Thursday after the Bank of Japan implemented aggressive easing measures aimed at spurring growth and combating deflation in the world’s third largest economy.

The BoJ, under the leadership of newly appointed Governor Haruhiko Kuroda, said it plans to double its asset purchase program over the next two years and extend the maturities of the bonds it purchases.


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