Investing.com - The euro fell to session lows against the dollar on Wednesday after a European Central Bank policymaker said that negative interest rates or asset purchases were options the bank could use to reach its inflation target.
EUR/USD was down 0.28% to 1.3398 during U.S. morning trade, still holding above the seven-week low of 1.3294 struck on Thursday.
The pair was likely to find support at 1.3343, Monday’s low and resistance at 1.3453, the session high.
The euro slid after ECB executive board member Peter Praet told the Wall Street Journal said the bank could cut deposit rates to below zero and undertake asset purchases to lift inflation closer to its target of just below 2%.
The comments came amid fears over growing deflationary pressures in the euro area. The annual rate of euro zone inflation fell to a four-year low of 0.7% in October, prompting the ECB to cut rates to a record low 0.25% last Thursday.
Data released on Tuesday showed that the annual rate of inflation in Germany, the euro zone’s largest economy, slowed to 1.2% in October, the lowest level in more than three years, from 1.4% in September.
The greenback remained supported after last week’s stronger than forecast U.S. nonfarm payrolls report prompted investors to bring forward expectations for a reduction in the Fed’s USD85 billion-a-month asset purchase program.
Investors were turning their attention to Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve, for indications on the future course of U.S. monetary policy.
The euro was also lower against the pound and the yen, with EUR/GBP down 0.74% to 0.8384 and EUR/JPY shedding 0.42% to trade at 133.32.
Sterling strengthened after the Bank of England brought forward the date it expects the unemployment rate to hit the 7% threshold at which it will consider raising rates and revised up its forecast for growth in its quarterly inflation report.
The bank reiterated that the unemployment rate falling below 7% would not automatically trigger an increase in interest rates.
The pound received an additional boost after official data on Wednesday showed that the number of people claiming unemployment benefits in the U.K. fell more than expected in October, and the U.K. unemployment rate ticked down to a more than three-year low of 7.6% in the three months to September.
Also Wednesday, data showed that industrial production in the euro zone fell 0.5% in September from a month earlier, but was 1.1% higher on a year-over-year basis. Economists had forecast a monthly decline of 0.3% and an annual increase of 0.2%.
EUR/USD was down 0.28% to 1.3398 during U.S. morning trade, still holding above the seven-week low of 1.3294 struck on Thursday.
The pair was likely to find support at 1.3343, Monday’s low and resistance at 1.3453, the session high.
The euro slid after ECB executive board member Peter Praet told the Wall Street Journal said the bank could cut deposit rates to below zero and undertake asset purchases to lift inflation closer to its target of just below 2%.
The comments came amid fears over growing deflationary pressures in the euro area. The annual rate of euro zone inflation fell to a four-year low of 0.7% in October, prompting the ECB to cut rates to a record low 0.25% last Thursday.
Data released on Tuesday showed that the annual rate of inflation in Germany, the euro zone’s largest economy, slowed to 1.2% in October, the lowest level in more than three years, from 1.4% in September.
The greenback remained supported after last week’s stronger than forecast U.S. nonfarm payrolls report prompted investors to bring forward expectations for a reduction in the Fed’s USD85 billion-a-month asset purchase program.
Investors were turning their attention to Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve, for indications on the future course of U.S. monetary policy.
The euro was also lower against the pound and the yen, with EUR/GBP down 0.74% to 0.8384 and EUR/JPY shedding 0.42% to trade at 133.32.
Sterling strengthened after the Bank of England brought forward the date it expects the unemployment rate to hit the 7% threshold at which it will consider raising rates and revised up its forecast for growth in its quarterly inflation report.
The bank reiterated that the unemployment rate falling below 7% would not automatically trigger an increase in interest rates.
The pound received an additional boost after official data on Wednesday showed that the number of people claiming unemployment benefits in the U.K. fell more than expected in October, and the U.K. unemployment rate ticked down to a more than three-year low of 7.6% in the three months to September.
Also Wednesday, data showed that industrial production in the euro zone fell 0.5% in September from a month earlier, but was 1.1% higher on a year-over-year basis. Economists had forecast a monthly decline of 0.3% and an annual increase of 0.2%.