Investing.com - The euro extended losses against the U.S. dollar on Thursday, falling to the lowest levels of the day after the European Central Bank cut its benchmark interest rate to a record low.
EUR/USD hit 1.2452 during European afternoon, the daily low and the lowest since June 29; the pair subsequently consolidated at 1.2457, slumping 0.57%.
The pair was likely to find support at 1.2406, the low from June 28 and resistance at 1.2607, Wednesday’s high.
The ECB cut its benchmark interest rate by 0.25%, bringing rates to a record low 0.75% in a bid to shore up economic growth in the euro zone.
The central bank also lowered its marginal lending to 1.50% from 1.75% and the deposit facility rate to 0% from 0.25%.
ECB president Mario Draghi was to comment on the decision at a press conference later in the day.
Market participants will scrutinize Draghi’s comments for clues in regards to the central bank's next course of action in dealing with an ongoing sovereign debt crisis.
The single currency came under further pressure after Spain sold at auction EUR2.997 billion of government bonds, in line with the full targeted amount of EUR3 billion, but at higher yields from last month.
The country sold EUR747 million of ten-year debt at an average yield of 6.43% earlier in the day, up from 6.044% at a similar auction last month.
The yield on Spanish 10-year bonds rose to 6.64% following the auction, re-approaching the critical 7%-level deemed as unsustainable in the long-term.
Elsewhere, the People’s Bank of China unexpectedly announced that it had lowered its benchmark interest rate by 0.31% to 6.00% from 6.31% effective July 6.
It was the second consecutive rate cut, after holding them unchanged since December 2008.
Meanwhile, the euro remained lower against the pound, with EUR/GBP slipping 0.52% to hit 0.7995.
Later in the day, the U.S. was to publish a report by payroll processing firm ADP on non-farm employment change, followed by government data on unemployment claims. In addition, the Institute of Supply Management was to release a report on U.S. service sector activity.
Markets were also eyeing Friday’s U.S. nonfarm payrolls report, amid speculation that the Federal Reserve could implement a third round of quantitative easing to shore up the economy, which has been hit by the ongoing crisis in the euro zone.
EUR/USD hit 1.2452 during European afternoon, the daily low and the lowest since June 29; the pair subsequently consolidated at 1.2457, slumping 0.57%.
The pair was likely to find support at 1.2406, the low from June 28 and resistance at 1.2607, Wednesday’s high.
The ECB cut its benchmark interest rate by 0.25%, bringing rates to a record low 0.75% in a bid to shore up economic growth in the euro zone.
The central bank also lowered its marginal lending to 1.50% from 1.75% and the deposit facility rate to 0% from 0.25%.
ECB president Mario Draghi was to comment on the decision at a press conference later in the day.
Market participants will scrutinize Draghi’s comments for clues in regards to the central bank's next course of action in dealing with an ongoing sovereign debt crisis.
The single currency came under further pressure after Spain sold at auction EUR2.997 billion of government bonds, in line with the full targeted amount of EUR3 billion, but at higher yields from last month.
The country sold EUR747 million of ten-year debt at an average yield of 6.43% earlier in the day, up from 6.044% at a similar auction last month.
The yield on Spanish 10-year bonds rose to 6.64% following the auction, re-approaching the critical 7%-level deemed as unsustainable in the long-term.
Elsewhere, the People’s Bank of China unexpectedly announced that it had lowered its benchmark interest rate by 0.31% to 6.00% from 6.31% effective July 6.
It was the second consecutive rate cut, after holding them unchanged since December 2008.
Meanwhile, the euro remained lower against the pound, with EUR/GBP slipping 0.52% to hit 0.7995.
Later in the day, the U.S. was to publish a report by payroll processing firm ADP on non-farm employment change, followed by government data on unemployment claims. In addition, the Institute of Supply Management was to release a report on U.S. service sector activity.
Markets were also eyeing Friday’s U.S. nonfarm payrolls report, amid speculation that the Federal Reserve could implement a third round of quantitative easing to shore up the economy, which has been hit by the ongoing crisis in the euro zone.