Investing.com - The euro dropped to five-week lows against the dollar on Thursday after European Central Bank President Mario Draghi said the bank expects to maintain interest rates at the current or lower levels for an “extended” period of time.
EUR/USD hit 1.2884 during European afternoon trade, the pair’s lowest since May 29; the pair subsequently consolidated at 1.2908, shedding 0.77%.
The pair was likely to find support at 1.2836, the low of May 29 and resistance at 1.3000.
Speaking at the bank’s post policy meeting press conference, Draghi said the decision to give forward guidance on interest rates was taken unanimously by policymakers and was “a very significant step forward” for the ECB.
Draghi said risks to growth in the euro zone remain “on the downside” and added that monetary policy will remain accommodative for as long as is necessary.
The comments came after the ECB left interest rates on hold at record lows of 0.5%.
The euro pared gains against the pound, with EUR/GBP up 0.55% to 0.8558, off session highs of 0.8632.
The pound fell sharply against the other major currencies on Thursday after the Bank of England left monetary policy unchanged and took the unusual step of publishing a rate statement.
The BoE said economic data over the past few months was consistent with the recovery set out by the bank in its May inflation report, but warned that the "significant upward movement" in bond yields would weigh on the outlook for growth.
“In the Committee’s view, the implied rise in the expected future path of Bank Rate was not warranted by the recent developments in the domestic economy”, the BoE said.
It was the BoE’s first meeting under the leadership of new Governor Mark Carney.
Trade volumes were expected to remain light on Thursday, with markets in the U.S. closed for the Independence Day holiday.
Investors were awaiting Friday’s closely watched U.S. nonfarm payrolls report for further clues on when the Federal Reserve may decide to unwind its USD85 billion-a-month stimulus program.
Data on Wednesday showed that the U.S. private sector added 188,000 jobs in June, more than expectations for an increase of 160,000.
EUR/USD hit 1.2884 during European afternoon trade, the pair’s lowest since May 29; the pair subsequently consolidated at 1.2908, shedding 0.77%.
The pair was likely to find support at 1.2836, the low of May 29 and resistance at 1.3000.
Speaking at the bank’s post policy meeting press conference, Draghi said the decision to give forward guidance on interest rates was taken unanimously by policymakers and was “a very significant step forward” for the ECB.
Draghi said risks to growth in the euro zone remain “on the downside” and added that monetary policy will remain accommodative for as long as is necessary.
The comments came after the ECB left interest rates on hold at record lows of 0.5%.
The euro pared gains against the pound, with EUR/GBP up 0.55% to 0.8558, off session highs of 0.8632.
The pound fell sharply against the other major currencies on Thursday after the Bank of England left monetary policy unchanged and took the unusual step of publishing a rate statement.
The BoE said economic data over the past few months was consistent with the recovery set out by the bank in its May inflation report, but warned that the "significant upward movement" in bond yields would weigh on the outlook for growth.
“In the Committee’s view, the implied rise in the expected future path of Bank Rate was not warranted by the recent developments in the domestic economy”, the BoE said.
It was the BoE’s first meeting under the leadership of new Governor Mark Carney.
Trade volumes were expected to remain light on Thursday, with markets in the U.S. closed for the Independence Day holiday.
Investors were awaiting Friday’s closely watched U.S. nonfarm payrolls report for further clues on when the Federal Reserve may decide to unwind its USD85 billion-a-month stimulus program.
Data on Wednesday showed that the U.S. private sector added 188,000 jobs in June, more than expectations for an increase of 160,000.