Investing.com - The euro rose to session highs against the dollar and the yen on Thursday after the European Central Bank announced no new monetary easing measures, confounding some market expectations for a rate cut.
EUR/USD hit 1.3619, the highest since January 30 and was last up 0.58% to 1.3611.
The pair was likely to find support at 1.3500 and resistance at 1.3640.
The euro initially turned lower after the ECB voted to leave interest rates across the euro zone unchanged at their record low of 0.25%. It also left the deposit rate unchanged at zero and the marginal lending rate, which banks pay to borrow from the ECB, unchanged.
But the common currency strengthened after ECB President Mario Draghi did not outline any new measures to shore up slowing inflation.
Draghi said the ECB sees a protracted period of low inflation, not full blown deflation, and reiterated that the bank is “monitoring developments closely". The recent slowdown in inflation is partly due to lower energy costs he said, adding that the recovery in the euro area is "still fragile and still uneven".
Data last week showed that the annual rate of inflation in the euro zone slowed to 0.7% in January, matching October’s four-year low, which prompted a rate cut by the central bank.
Draghi firmly reiterated the ECB's forward guidance, saying that rates will maintain at their current record levels, or lower, for an extended period, and said the bank could take further decisive action if necessary.
He also said domestic demand should improve, while survey data indicated that the recovery in the euro zone was continuing. Risks to recovery remain on the downside, he said, adding that uncertainties in emerging markets could affect future economic conditions.
In the U.S., data on Thursday showed that the number of people who filed for unemployment assistance last week fell more-than-expected.
The Labor Department said initial jobless claims fell by 20,000 to 331,000 from the previous week’s revised total of 351,000. Analysts had expected jobless claims to fall by 16,000.
Investors were turning their attention to Friday’s U.S. nonfarm payrolls report for January, after poor U.S. manufacturing data earlier in the week sparked concerns over a possible slowdown in the economic recovery.
Elsewhere, the euro was higher against the pound, with EUR/GBP advancing 0.44% to 0.8334, up from 0.8296 on Wednesday.
The Bank of England left interest rates unchanged at record lows of 0.5% following its meeting on Thursday, where they have been unchanged since March 2009.
The bank also made no change to its quantitative easing program, which remains at 375 billion pounds.
The euro rose to session highs against the yen, with EUR/JPY jumping 0.95% to 138.60.