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Forex - EUR/USD steady after ECB keep rates unchanged

Published 02/09/2012, 08:01 AM
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EUR/GBP
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Investing.com - The euro was steady against the U.S. dollar on Thursday, after the European Central Bank left its benchmark interest rate unchanged, as hopes for a resolution to pave the way for a second Greek bailout supported the single currency.

EUR/USD hit 1.3215 during European afternoon trade, the session low; the pair subsequently consolidated at 1.3249, dipping 0.08%.

The pair was likely to find support at 1.3088, Wednesday’s low and resistance at 1.3311, the session high and an eight-week high.

The ECB said it was maintaining the benchmark interest rate at a record-low 1.0% for the second consecutive month, in line with market expectations.  

Investors were also looking ahead to the bank’s press conference later in the day, amid expectations that ECB President Mario Draghi could flag a possible rate cut next month.

The euro remained supported by expectations that the Greek government would reach a deal on further austerity measures ahead of a meeting of euro zone finance ministers later in the day.

Following talks on Wednesday, Greek Prime Minister Lucas Papademos said political leaders had reached an agreement in principle, but the issue of proposed pension cuts remained unresolved.

The euro was lower against the pound, with EUR/GBP shedding 0.32% to hit 0.8357.

The pound strengthened broadly after the Bank of England increased its quantitative easing program by GBP50 billion and left interest rates unchanged at a record low 0.5% earlier.


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