Forex - EUR/USD falls on Draghis pessimistic words

Investing.com - The euro traded down against the U.S. dollar Thursday, moving close to a two-month low after European Central Bank President Mario Draghi stated economic activity in the euro area is expected to remain weak, while strong U.S. data lifted the greenback. 

EUR/USD hit 1.2743 during U.S. afternoon trade, falling 0.23%

The pair was likely to find support at 1.2625, the low of September 7 and resistance at 1.2876, Wednesday's high. 

Speaking at a press conference following the ECB's November policy meeting, Draghi said that the bank expects the euro zone economy to remain weak "in the near term", but financial market confidence "has visibly improved on the back of our decisions as regards Outright Monetary Transactions," he added, referrring to the bank's bond buying program unveiled in September. 

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

On Wednesday, the European Commission said that the euro zone economy will barely grow next year but pick up in 2014, forecasting slower growth than governments in all the bloc's biggest economies expect. 

Sentiment on the single currency also remained vulnerable after a successful Spanish bond auction earlier in the day 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. 

Meanwhile, the greenback found support after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending November 3 fell to a seasonally adjusted 355,000, compared to expectations for an increase to 370,000.

Jobless claims rose by 363,000 in the preceding week. 

A separate report showed that the U.S. trade deficit narrowed to USD41.5 billion in September from a deficit of USD43.8 billion in August, whose figure was revised from a previously reported deficit of USD44.2 billion.

Analysts had expected the U.S. trade deficit to widen to USD45.0 billion. 

Elsewhere, the euro was lower against the pound with EUR/GBP slipping 0.19%, to hit 0.7975. 

In other news Thursday, the Bank of England said it was maintaining the benchmark interest rate at 0.50% and the size of its asset purchase program unchanged at GBP375 billion, following its policy-setting meeting.