Investing.com -- EUR/USD fell mildly on Thursday, as the minutes from the European Central Bank's March meeting depicted a broadly unified Governing Council on the prospects of implementing comprehensive easing measures as a means for boosting economic growth throughout the euro area.
The currency pair traded in a tight range between 1.1338 and 1.1454, before closing at 1.1377, down 0.0022 or 0.19%. The euro closed above 1.13 versus the dollar for the seventh consecutive session. Over the last month of trading, the euro has surged more than 3.3% against its American counterpart amid strong indications that the Federal Reserve and the ECB will avoid even sharper divergences at least for the time being.
EUR/USD likely gained support at 1.0538, the low from December 3 and was met with resistance at 1.1496, the high from Oct. 15.
The minutes from the ECB's March policy meeting, released on Thursday morning, showed a broadly united Governing Council, which appeared to be supportive of the decisions made by president Mario Draghi. At the closely-watched meeting last month, the ECB lowered its deposit rate deeper into negative territory by reducing it by 0.1 to Minus-0.4%. The Governing Council also cut the marginal lending rate by 0.05 to 0.25% and the refinance rate by 0.05% to zero. At the same time, the central bank increased the size of monthly purchases with its bond-buying program by €20 billion to €80 billion a month and extended the program by several months through March, 2017.
"Taking into account the views expressed by the members of the governing council, the president concluded that a large majority of voting members supported the proposed policy package," the minutes stated. "Overall, the recovery in the euro area economy was expected to continue at a more subdued pace, while the risks to the growth outlook were mostly seen to remain tilted to the downside. These risks related in particular to the heightened uncertainties regarding the external environment and to broader geopolitical risks."
"Against this background, members reiterated the necessity for other policy areas to support sustained output growth and that monetary policy on its own was not sufficient. There was a need for both structural reforms and fiscal policy to also play their part."
Investors also digested hawkish minutes from the Fed that it will remain cautious with the timing of future interest rate hikes in the near-term. At the Federal Open Market Committee's (FOMC) March meeting, the U.S. central bank held the target range of its benchmark Federal Funds Rate at its current level between 0.25-0.50%. While some members were inclined to consider raising short-term interest rates later this month, the minutes from the March meeting suggest that the committee remains concerned about heightened global financial and economic risks abroad. Specifically, the majority of the members agreed that there could be little room to ease policy through conventional means if the economy or inflation suffered an unexpected shock.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, reached an intraday high of 94.67 on Thursday, before falling back to 94.50 (up 0.01%) at the close. The index remains near five-month lows.
Any rate hikes by the Fed this year are viewed as bullish for the dollar as foreign investors pile into the greenback in an effort to take advantage of higher yields. On bond markets, yields on the U.S. 10-Year tumbled seven basis points to 1.68%, their lowest level in nearly two months.