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Forex - EUR/USD almost unchanged as markets digest ECB remarks

Published 12/05/2014, 02:26 AM
Euro holds steady vs. dollar as Draghi effect subsides
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Investing.com - The euro was almost unchanged against the U.S. dollar on Friday, after the release of upbeat German factory order data as markets were digesting comments made by European Central Bank President Mario Draghi on Thursday.

EUR/USD hit 1.2366 during late Asian trade, the session low; the pair subsequently consolidated at 1.2377, dipping 0.01%.

The pair was likely to find support at 1.2280, Thursday's low and a two-year low and resistance at 1.2478, the high of December 2.

Official data earlier showed that German factory orders rose 2.5% in October, exceeding expectations for a 0.6% gain. Factory orders in September were revised to an increase of 1.1% from a previously estimated 0.8% rise.

The single currency had strengthened broadly on Thursday after ECB President Mario Draghi indicated that it would not embark on quantitative easing for now, saying the bank would reassess its stimulus program in the first quarter of 2015.

Draghi said the bank could potentially change the size, scale and composition of its existing stimulus programs. The governing council remains unanimous that it will take further measures, if necessary, he added.

The ECB substantially revised down its forecasts for growth and inflation and warned that the latest forecasts do not take into account the recent steep drop in oil prices.

The comments came after the bank left euro zone interest rates on hold at their current record lows of 0.05%, in a widely anticipated decision.

Meanwhile, the dollar remained supported by growing optimism over the U.S. economic recovery after the Department of Labor reported on Thursday that the number of individuals filing for initial jobless benefits in the week ending November 29 decreased by 17,000 to 297,000 from the previous week’s revised total of 314,000.

The euro was higher against the pound, with EUR/GBP adding 0.16% to 0.7911.

Later in the day, the U.S. was to release the closely watched government report on nonfarm payrolls, the unemployment rate and average earnings, as well as a report on factory orders.

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