Investing.com - The euro shot up on Thursday after the European Central Bank left interest rates unchanged despite soft inflationary pressures.
In U.S. trading, EUR/USD was trading at 1.3848, up 0.84%, up from a session low of 1.3722 and off a high of 1.3858.
The pair was likely to find support at 1.3707, Wednesday's low, and resistance at 1.3894, the high from Dec. 27.
The ECB left its benchmark interest rate unchanged at 0.5%, as recent data indicated moderate economic recovery in the euro zone.
ECB President Mario Draghi added that he was encouraged by Wednesday data revealing that business activity in the euro zone rose to a 32-month high in February and praised improvements in the services sector, which accounts for the majority of job growth.
Draghi reiterated the ECB’s forward guidance on rates, stressing that interest rates will remain at their present levels or lower for an extended period. The ECB remains determined to maintain the high degree of accommodative monetary policy for as long as needed, and will take further actions as it sees fit, he added.
Still, the decision to leave policy unchanged bolstered the single currency on Thursday.
The central bank revised its forecast for economic growth in 2014 to 1.2% from 1.1% in December.
However, the bank revised down its inflation forecast for this year to 1.0% from 1.1% in December. The bank expects inflation to pick up to 1.3% in 2015 and 1.5% in 2016, remaining below the bank’s target of just under 2%.
Meanwhile in the U.S., the Department of Labor reported earlier that the number of individuals filing for initial jobless benefits last week fell by 26,000 to 323,000 from the previous week’s revised total of 349,000.
Analysts were expecting jobless claims to fall by 11,000 to 338,000 last week.
A separate report showed that U.S. factory orders fell 0.7% in February compared to expectations for a 0.4% decline.
The euro was up against the pound, with EUR/GBP up 0.71% to 0.8272, and up against the yen, with EUR/JPY gaining 1.56% and trading at 142.69.
On Friday in the euro zone, Germany is to publish data on industrial production.
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.