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Forex - EUR/USD edges higher after ECB holds

Published 04/03/2014, 07:57 AM
Euro edges higher after ECB leaves monetary policy unchanged
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Investing.com - The euro edged up to session highs against the dollar on Thursday after the European Central Bank left monetary policy on hold, as investors awaited the bank’s post-policy meeting press conference with President Mario Draghi.

EUR/USD hit session highs of 1.3778 and was last up 0.06% to 1.3774, holding below the one-week highs of 1.3819 reached on Wednesday.

The pair was likely to find support at 1.3704, the low of March 28 and a one-month trough and resistance at 1.3819.

The ECB voted to leave its benchmark interest rate unchanged at a record-low 0.25%. The central bank also held its marginal lending rate at 0.75% and left its deposit facility rate unchanged at zero.

Recent weak euro zone inflation data has added to pressure on the ECB to take steps to stave off the risk of deflation in the region.

On Wednesday, International Monetary Fund head Christine Lagarde urged the central bank to do more to combat low inflation in the region, warning that slow price growth could undermine the fragile global recovery.

However, recent comments by ECB officials played down concerns over slowing inflation, saying it was due in large part to temporary factors.

The shared currency edged higher against the yen, with EUR/JPY inching up 0.08% to 143.13 not far from the three-week high of 143.46 reached on Wednesday.

The euro was also higher against the pound, with EUR/GBP rising 0.18% to 0.8296.

Sterling slipped after data released on Thursday showed that while the U.K. service sector continued to expand steadily in March the rate of expansion was the slowest in nine months.

The Markit/CIPS services purchasing managers index ticked down to 57.6 last month from 58.2 in February. Analysts had expected the index to decline to 58.1.

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