Investing.com – The euro trimmed losses against the U.S. dollar in volatile trade on Thursday, after European Central Bank President Jean-Claude Trichet said that the banks interest rate hike was not necessarily the first in a series.
EUR/USD retreated from 1.4242, the daily low, to hit 1.4306 during U.S. morning trade, down 0.17% on the day.
The pair was likely to find support at 1.4207, Wednesday’s low and resistance at 1.4348, Wednesday’s high and a 14-month high.
Earlier in the day, the central bank increased its key interest rate for the first time since July 2008 to 1.25% from 1%, as expected.
Speaking at a press conference after the announcement, Mr. Trichet said monetary policy remained “very accommodative,” adding that the "rate hike will help keep inflation expectations anchored."
He also noted the central bank would continue to monitor all developments “very closely,” and he encouraged Portugal’s move to seek international support.
On Wednesday, Portugal became the third euro zone member to seek a bailout from the European Union, with the size of the package expected to be as much as EUR80 billion.
The central bank’s primary concern is tackling inflation, which breached its 2% limit in December and accelerated to 2.6% last month, the fastest pace in more than two years.
The euro was also lower against the pound, with EUR/GBP shedding 0.15% to hit 0.8760.
Also Thursday, the U.S. Department of Labor said jobless-benefit claims fell 10,000 last week to 382,000, the fewest since February 26.
EUR/USD retreated from 1.4242, the daily low, to hit 1.4306 during U.S. morning trade, down 0.17% on the day.
The pair was likely to find support at 1.4207, Wednesday’s low and resistance at 1.4348, Wednesday’s high and a 14-month high.
Earlier in the day, the central bank increased its key interest rate for the first time since July 2008 to 1.25% from 1%, as expected.
Speaking at a press conference after the announcement, Mr. Trichet said monetary policy remained “very accommodative,” adding that the "rate hike will help keep inflation expectations anchored."
He also noted the central bank would continue to monitor all developments “very closely,” and he encouraged Portugal’s move to seek international support.
On Wednesday, Portugal became the third euro zone member to seek a bailout from the European Union, with the size of the package expected to be as much as EUR80 billion.
The central bank’s primary concern is tackling inflation, which breached its 2% limit in December and accelerated to 2.6% last month, the fastest pace in more than two years.
The euro was also lower against the pound, with EUR/GBP shedding 0.15% to hit 0.8760.
Also Thursday, the U.S. Department of Labor said jobless-benefit claims fell 10,000 last week to 382,000, the fewest since February 26.