Investing.com -- EUR/USD fell mildly on Thursday, ahead of a key U.S. jobs report, as the European Central Bank and OPEC completed a pair of closely-watched meetings on Thursday without making any major policy changes.
The currency pair traded in a tight range between 1.1145 and 1.1220 before settling at 1.1189, down 0.0033 or 0.29% on the session. The euro starts June on the heels of one of its worst months of the year, when it plunged more than 2.85% against the dollar, falling sharply from its level at the start of the month when it surged to nine-month highs above 1.16. Despite the recent declines, the euro is still holding onto considerable gains from the start of the year. Since opening the year at 1.08, the euro is up by more than 2.5% against its American counterpart year to date. EUR/USD has still closed under 1.12 in each of the last eight sessions.
EUR/USD likely gained support at 1.1055, the low from March 15 and was met with resistance at 1.1434, the high from May 12.
In Vienna, the ECB's Governing Council left interest rates unchanged ahead of the launch of a highly-anticipated corporate bond buying program next week, as inflation continues to remain stubbornly low. ECB president Mario Draghi opened his press conference on Thursday by noting that the Governing Council expects interest rates to remain low for a lengthy period, but did not add whether it plans to extend a comprehensive quantitative easing program beyond next March. While Draghi left the possibility open for further easing measures, he reiterated the ECB's main goal is to make sure that long-term inflation returns back toward its targeted objective.
Economists from the ECB raised their growth forecasts in the euro area by 0.2 to 1.6% for 2016, while leaving their projection for 2017 growth unchanged at 1.7%.
"Monetary policy is focused on maintaining price stability over the medium term and its accommodative stance supports economic activity. As emphasized repeatedly by the Governing Council, and as again strongly echoed in both European and international policy discussions, in order to reap the full benefits from our monetary policy measures, other policy areas must contribute much more decisively, both at the national and at the European levels," Draghi said. "Structural policies are essential, given continued high structural unemployment and low potential output growth in the euro area. Structural reforms are necessary in all euro area countries, although specific reform needs differ across the individual economies."
The ECB's decision could prompt the Federal Reserve to raise short-term interest rates when it meets next on June 14-15. Some hawkish members of the Fed have been hesitant to lift rates as the ECB and the Bank of Japan continue to maintain a negative interest rate policy. The Federal Open Market Committee (FOMC) has left the target range of its benchmark Federal Funds Rate at a level between 0.25 and 0.50% in each of its first three meetings this year. In December, the FOMC abandoned a seven-year zero interest rate policy by lifting rates for the first time in nearly a decade. Any rate hikes by the Fed this year are viewed as bearish for gold, which struggles to compete with high-yield bearing assets in rising rate environments.
Also in Vienna, OPEC ended its semi-annual meeting without reaching an agreement to cap its production ceiling. While Saudi Arabia pledged to resist the temptation of flooding global energy markets with a glut of supply, Iran offered few hints that it will slow production in the coming months. Crude prices have fallen sharply since OPEC allowed production to exceed 30 million barrels per day in November, 2014, leading to a prolonged rout in global oil prices.
Investors await Friday's critical U.S. jobs report for further indications on the timing of the Fed's next rate hike. Analysts predict that the economy added 158,000 nonfarm payrolls in May, following modest gains of 160,000 a month earlier. The unemployment rate is expected to inch down by 0.1 to 4.9%.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose more than 0.15% to an intraday high of 95.58 before settling near session-highs at 95.56.