Forex - EUR/USD eases off session lows after ECB holds pat

Published 11/08/2012, 07:58 AM
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Investing.com - The euro came off session lows against the U.S. dollar on Thursday, after the European Central Bank left its benchmark interest rate unchanged at a record low for the fourth consecutive month in November.

EUR/USD eased back from 1.2720, the pair’s lowest since September 7, to hit 1.2747 during European afternoon trade, still down 0.19% for the day.

The pair was likely to find support at 1.2625, the low of September 7 and resistance at 1.2779, the session high.

The ECB said it was maintaining the benchmark interest rate at a record-low 0.75%, in line with market expectations. 

Investors were awaiting ECB President Mario Draghi's press conference later in the session, amid concerns that the economic slump in the euro zone is deepening.

On Wednesday, the European Commission slashed its forecast for growth in the euro zone, saying it now expects gross domestic product to contract by 0.4% this year, expand by just 0.1% in 2013 before growing 1.4% in 2014.

The euro remained under pressure after a successful Spanish bond auction on Thursday eased pressure on Prime Minister Mariano Rajoy to request a bailout before the end of this year.

Spain sold EUR4.76 billion of three-year, five-year and 20-year bonds, which will allow the country to meet its financing requirements for 2012.

Overall market sentiment was weighed by concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement, which could threaten U.S. and global growth.

The euro was trading close to a five-week low against the pound, with EUR/GBP down 0.26% to 0.7968 and was near a one-month low against the yen, with EUR/USD falling 0.34% to 101.81.

Later Thursday, the U.S. was to publish official data on the trade balance as well as the weekly government report on initial jobless claims.



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