Investing.com - The euro extended steep losses against the dollar on Thursday after European Central Bank President Mario Draghi indicated that further monetary easing is still possible after the bank surprised markets with a rate cut, while the dollar was boosted by stronger-than-forecast third quarter growth.
EUR/USD hit 1.3298 European afternoon trade, the lowest since September 13; the pair subsequently consolidated at 1.3339, dropping 1.28%.
The pair was likely to find support at 1.3255, the low of September 12 and resistance at 1.3450.
Draghi confirmed that the ECB cut its benchmark interest rate to a record low 0.25% from 0.5%, saying the decision was 'in line' with the ECB's forward guidance on interest rate policy from July.
The bank cut its marginal lending to 0.75% from 1% and left its deposit facility rate unchanged at 0.0%.
Draghi reiterated that euro zone borrowing costs will remain at their present or lower levels until conditions improve, indicating that further rate cuts are still possible.
The euro zone may experience "a prolonged period of low inflation", Draghi warned, followed by a gradual return back to the bank’s target of close to, but still below 2%.
He said the decline in euro zone inflation in October was stronger than expected and added that inflation is expected to remain at low levels in the coming months.
The euro pared losses against the yen, with EUR/JPY dropping 0.59% to 132.52, after falling as low as 131.90 earlier.
Elsewhere, the shared currency was trading close to 10-month lows against the pound, with EUR/GBP down 0.90% to 0.8329.
The Bank of England’s monetary policy committee voted to leave rates on hold at 0.5% following its meeting on Thursday and made no change to the GBP375 billion quantitative easing package.
The dollar strengthened across the board after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.
The robust data cemented expectations that the Federal Reserve will start to taper its stimulus program at its next monthly meeting in December.
The dollar advanced to six-week highs against the yen, with USD/JPY climbing 0.74% to 99.39.
EUR/USD hit 1.3298 European afternoon trade, the lowest since September 13; the pair subsequently consolidated at 1.3339, dropping 1.28%.
The pair was likely to find support at 1.3255, the low of September 12 and resistance at 1.3450.
Draghi confirmed that the ECB cut its benchmark interest rate to a record low 0.25% from 0.5%, saying the decision was 'in line' with the ECB's forward guidance on interest rate policy from July.
The bank cut its marginal lending to 0.75% from 1% and left its deposit facility rate unchanged at 0.0%.
Draghi reiterated that euro zone borrowing costs will remain at their present or lower levels until conditions improve, indicating that further rate cuts are still possible.
The euro zone may experience "a prolonged period of low inflation", Draghi warned, followed by a gradual return back to the bank’s target of close to, but still below 2%.
He said the decline in euro zone inflation in October was stronger than expected and added that inflation is expected to remain at low levels in the coming months.
The euro pared losses against the yen, with EUR/JPY dropping 0.59% to 132.52, after falling as low as 131.90 earlier.
Elsewhere, the shared currency was trading close to 10-month lows against the pound, with EUR/GBP down 0.90% to 0.8329.
The Bank of England’s monetary policy committee voted to leave rates on hold at 0.5% following its meeting on Thursday and made no change to the GBP375 billion quantitative easing package.
The dollar strengthened across the board after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.
The robust data cemented expectations that the Federal Reserve will start to taper its stimulus program at its next monthly meeting in December.
The dollar advanced to six-week highs against the yen, with USD/JPY climbing 0.74% to 99.39.