Forexpros – The euro extended gains against the U.S. dollar on Thursday, as sentiment was lifted by hopes for progress in the formation of a new coalition government in Greece, but investors remained cautious as concerns over the country’s financial woes persisted.
EUR/USD hit 1.2977 during U.S. morning trade, the daily high; the pair subsequently consolidated at 1.2971, rising 0.34%.
The pair was likely to find support at 1.2886, the low of January 20 and resistance at 1.3006, Wednesday’s high.
The euro found support amid hopes Greek Socialist leader Evangelos Venizelos would manage to form a government on Thursday.
Venizelos, who was the country’s former finance minister, said he would approach all political party leaders and try to get New Democracy, Syriza and Democratic Left to form a pro-European national unity government.
On Wednesday, Alexis Tsipras, the head of Greece’s second-biggest party Syriza, gave up his attempt to form a new government, pushing the debt-stricken country closer to its second election in a few weeks.
In the U.S., the Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending May 5 fell to 367,000, defying expectations for an increase of 1,000 to 369,000.
The previous week’s figure was revised up to 368,000 from 365,000.
Meanwhile, a separate report showed that the U.S. trade deficit widened to USD51.8 billion in March from deficit of USD45.4 billion in February.
Analysts had expected the U.S. trade deficit to widen to USD50.0 billion.
Data also showed that import prices in the U.S. fell more-than-expected in April, declining 0.5% after a 1.5% the previous month. Analysts had expected import prices to fall 0.1% in April.
Elsewhere, the euro was steady against the pound with EUR/GBP inching up 0.03%, to hit 0.8018.
Also Thursday, the Bank of England kept its benchmark interest rate unchanged at a record low of 0.5%, in a widely expected move and announced no change to the size of its asset purchase facility which stands at GBP325 billion, following a GBP50 billion increase in February.
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