Investing.com - The euro firmed against the dollar on Thursday after the European Central Bank left interest rates unchanged, while ECB President Mario Draghi said monetary authorities will not consider loosening policy to stave off deflationary pressures for now.
In U.S. trading, EUR/USD was trading at 1.3603, up 0.52%, up from a session low of 1.3483 and off a high of 1.3619.
The pair was likely to find support at 1.3478, Monday's low, and resistance at 1.3717, the high from Jan. 27.
The euro softened earlier after the ECB voted to leave interest rates across the euro zone unchanged at a record-low 0.25%, but the common currency strengthened after ECB President Mario Draghi did not outline any new measures to shore up slowing inflation.
Draghi said the ECB sees a protracted period of low inflation, not full blown deflation, and reiterated that the bank is “monitoring developments closely" and won't likely make any decisions until the bank reviews more economic indicators, which markets interpreted as March at the earliest.
Deflationary concerns arose last week after data revealed that the annual rate of inflation slowed to 0.7% in January, which stoked expectations the ECB would either trim rates or leave policy unchanged but accompany it with dovish language.
Meanwhile in the U.S., the dollar found some support after data revealed that the number of individuals filing for unemployment assistance in the U.S. fell more than expected last week.
The Labor Department said initial jobless claims fell by 20,000 to 331,000 from the previous week’s revised total of 351,000. Analysts were expecting jobless claims to fall by 16,000.
A separate report showed that the U.S. trade deficit widened significantly in December, as exports dropped 2.2% and imports rose 1.6%.
Investors were turning their attention to Friday’s U.S. nonfarm payrolls report for January, after poor U.S. manufacturing data earlier in the week sparked concerns over a possible slowdown in the economic recovery.
Growing sentiments that harsh winter weather may be bruising economic indicators and not waning demand have given the dollar some support.
The euro was up against the pound, with EUR/GBP gaining 0.30% to 0.8323, and up against the yen, with EUR/JPY trading up 0.91% at 138.55.