Investing.com - The euro edged higher against the dollar on Thursday, as comments by European Central Bank governing council member Jens Weidmann lent support, offsetting concerns over the risk of deflation in the euro area.
EUR/USD hit session highs of 1.3628 and was last up 0.10% to 1.3617.
The pair was likely to find support at 1.3552, the low of January 8 and resistance at 1.3675.
The euro found support after Weidmann played down fears over the threat of deflation in the currency bloc. "In the current economic situation, the risk is of a broad deflation in the euro zone is limited," he said.
Weidmann, who is the head of Germany’s Bundesbank, said he saw the upswing in the German economy continuing into this year and the next. The remarks came during a speech in Berlin.
The comments came as data confirmed the annual rate of consumer inflation remained well below the ECB’s 2% target in December.
Eurostat said consumer price inflation rose 0.8% on a year-over-year basis in December, in line with expectations and unchanged from a preliminary estimate.
The euro struggled to build on gains as demand for the dollar continued to be underpinned after upbeat U.S data bolstered sentiment on the economic outlook.
Data released on Wednesday showed that manufacturing activity in the Empire State expanded at the fastest pace since May 2012 in January as new orders rose sharply.
A separate report showed that U.S. producer price inflation rose at the strongest rate in six months in December.
Investors were looking ahead to U.S. data on inflation and initial jobless claims, due for release later in the trading day.
The common currency was higher against the yen, with EUR/JPY rising 0.20% 142.55. Meanwhile, EUR/GBP climbed 0.29% to 0.8334.