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Forex - EUR/USD slips close to 11-1/2 year lows on Draghi remarks

Published 03/06/2015, 02:06 AM
Euro remains close to multi-year lows against the dollar
EUR/USD
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EUR/GBP
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Investing.com - The euro slipped lower against the U.S. dollar on Friday, to trade close to Thursday's 11-1/2 year lows as European Central Bank President Mario Draghi's comments continued to weigh on the single currency.

EUR/USD hit 1.1015 during late Asian trade, the session low; the pair subsequently consolidated at 1.1019, slipping 0.08%.

The pair was likely to find support at 1.0986, Thursday's low and an 11-1/2 year low and resistance at 1.1187, the high of March 4.

On Thursday, Draghi confirmed that the ECB will begin purchasing euro zone government bonds on March 9 under its new quantitative easing program.

The combined asset purchases will amount to €60 billion per month and are expected to run until September 2016, or until the ECB sees that inflation is on a “sustained path” to its target of close to, but below, 2% in the medium term.

In addition, the ECB raised its growth forecast for this year to 1.5% from 1.0% previously, followed by faster growth in 2016 and 2017.

But it cut its inflation forecast for 2015, saying it now expects inflation to be flat, down from 0.7% previously. It then expects inflation to increase to 1.5% in 2016, up from 1.3% and 1.8% in 2017.

Meanwhile, sentiment on the dollar remained fragile after data on Thursday showed that the number of Americans who filed for unemployment assistance rose by 7,000 to 320,000 last week from the previous week’s total of 313,000.

The euro was also lower against the pound, with EUR/GBP edging down 0.10% to 0.7229.

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

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