Investing.com - The euro was trading close to three-week lows against the dollar on Thursday amid growing expectations that the European Central Bank will implement fresh policy measures to stave off the risk of deflation in the euro zone.
EUR/USD hit lows of 1.3741, the weakest since March 6 and was last down 0.16% to 1.3761.
The pair was likely to find support at 1.3720 and resistance at 1.3796, the session high.
The euro weakened after ECB governing council member and Bundesbank head Jens Weidmann said Tuesday that a negative deposit rate could be an appropriate way to address the impact of strong gains in the euro.
He also said it was not out of the question for the ECB to buy loans or other assets from banks to fight deflation, indicating a softening of the Bundesbank’s stance on quantitative easing.
The same day ECB President Mario Draghi that the central bank stood ready to act if inflation slipped lower than the bank expected.
Investors were looking ahead to next week’s euro zone inflation report, scheduled for release on Monday, ahead of the bank’s upcoming policy meeting later in the week.
In the U.S., data released on Thursday showed that U.S. jobless claims fell to the lowest level since late November last week, while another report showed that U.S. fourth quarter growth was revised higher.
Official data showed that U.S. gross domestic product was revised up to 2.6% in the final three months of 2013, from a preliminary estimate of 2.4%. Market expectations had been for an upward revision to 2.7%.
The report showed that personal spending was revised up to 3.3% from 2.6% initially, the fastest rate of growth in three years.
Meanwhile, the Labor Department said the number of people who filed for initial jobless benefits in the U.S. last week declined by 10,000 to a seasonally adjusted 311,000 from the previous week’s revised total of 321,000. Analysts had expected jobless claims to rise by 4,000.
The upbeat data added to hopes that the slowdown in economic activity seen at the start of the year would be temporary.
However, a separate report showed that pending home sales in the U.S. fell to a more than two year low in February, underlining concerns over the housing sector.
Elsewhere, the euro fell to three-week lows against the stronger pound on Thursday, with EUR/GBP down 0.52% to 0.8270.
Sterling was boosted after data showing that U.K. retail sales jumped in February underlined optamism over the rapid economic recovery.
The single currency was also weaker against the yen, with EUR/JPY sliding 0.14% to 140.52.