Investing.com - The euro was hovering close to a fresh two-year low against the U.S. dollar on Thursday, as market sentiment remained under pressure amid sustained euro zone debt concerns and after the Federal Reserve dampened expectations for further stimulus measures.
EUR/USD hit 1.2168 during U.S. morning trade, a two-year low; the pair subsequently consolidated at 0.2187, shedding 0.43%.
The pair was likely to find support at 1.2168, the session low and resistance at 1.2296, Wednesday’s high.
The euro was hit after the European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.
Traders also remained jittery after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
In the U.S., official data showed earlier that the number of people who filed for unemployment assistance last week fell significantly more-than-expected, matching the lowest level in four years.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 7 fell to a seasonally adjusted 350,000, compared to expectations for a decline to 372,000.
The data came after the Fed said in the minutes of its June policy meeting that the U.S. economy would have to worsen further before the central bank implements additional easing measures.
While a few policymakers said the bank should ease policy to move the economy toward its targets for full employment and stable prices, others indicated that more action could be warranted if growth slows, risks intensified or if inflation seemed likely to fall “persistently” below their goal.
Elsewhere, the euro was trading close to a three-and-a-half year low against the pound with EUR/GBP easing 0.03%, to hit 0.7894.
Also Thursday, official data showed that industrial production in the euro zone rose for the first time in three months in May, increasing by 0.6%. Analysts had expected a modest 0.1% decline.
EUR/USD hit 1.2168 during U.S. morning trade, a two-year low; the pair subsequently consolidated at 0.2187, shedding 0.43%.
The pair was likely to find support at 1.2168, the session low and resistance at 1.2296, Wednesday’s high.
The euro was hit after the European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.
Traders also remained jittery after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
In the U.S., official data showed earlier that the number of people who filed for unemployment assistance last week fell significantly more-than-expected, matching the lowest level in four years.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending July 7 fell to a seasonally adjusted 350,000, compared to expectations for a decline to 372,000.
The data came after the Fed said in the minutes of its June policy meeting that the U.S. economy would have to worsen further before the central bank implements additional easing measures.
While a few policymakers said the bank should ease policy to move the economy toward its targets for full employment and stable prices, others indicated that more action could be warranted if growth slows, risks intensified or if inflation seemed likely to fall “persistently” below their goal.
Elsewhere, the euro was trading close to a three-and-a-half year low against the pound with EUR/GBP easing 0.03%, to hit 0.7894.
Also Thursday, official data showed that industrial production in the euro zone rose for the first time in three months in May, increasing by 0.6%. Analysts had expected a modest 0.1% decline.