Investing.com - The euro fell to the day’s lows against the dollar on Thursday after European Central Bank President Mario Draghi downplayed the significance of the jump in euro area inflation in December.
EUR/USD touched lows of 1.0590 before pulling back to 1.0616, off 0.12% for the day.
Speaking at the bank’s post-policy meeting press conference, Draghi played down the significance of the jump in euro area inflation in December, saying that underlying inflation pressure remains “subdued.”
The annual rate of inflation in the euro area rose to 1.1% last month, the highest rate in more than three years.
The increase in inflation was mainly driven by energy prices and Draghi said the ECB would be monitoring whether rises in energy prices feed through to other prices.
He acknowledged that the growth outlook for the euro area has improved, but reiterated that quantitative easing can be increased if the outlook becomes less favorable.
He said that risks to euro area growth outlook remain tilted to downside due to global factors, adding that the outcome of the economic analysis "confirmed the need for the continued, very substantial degree of monetary accommodation."
At Thursday's meeting, the ECB kept its overnight deposit rate steady at -0.40%.
The main refinancing rate was unchanged at zero, while the rate on the marginal lending facility stayed at 0.25%.
The dollar was boosted after reports showing that U.S. jobless claims fell unexpectedly last week to 234,000, while U.S. housing starts rebounded strongly in December.
Investors were looking ahead to remarks by Federal Reserve Chair Janet Yellen later Thursday.
In remarks on Wednesday, Yellen indicated that the U.S. central bank is prepared for a quick pace of rate hikes this year.
The euro was weaker against sterling, with EUR/GBP down 0.57% at 0.8622.