Forexpros – The euro traded lower against the U.S. dollar Thursday, as worries over high Spanish borrowing costs combined with data indicating U.S. jobless claims fell to the lowest level in almost four years last week resulted in greenback buying
EUR/USD dropped to 1.3034 during U.S. morning trade, the pair’s lowest since March 16; the pair subsequently consolidated at 1.3060, later in the session, giving back 0.62%.
The pair was likely to find support at 1.3003, the low of March 15 and a one-month low and resistance at 1.3163, the session high.
Starting the selloff in the euro, Spain’s borrowing costs continued to rise in the wake of Wednesday’s weak government bond auction. The yield on the country’s 10-year bond climbed to 5.71% earlier, the highest level since mid-December.
Meanwhile, concerns over the outlook for growth in the euro zone increased following a recent string of weak economic data.
Earlier Thursday, official data showed that German industrial production dropped 1.3% in February, more than expectations for a 0.5% drop, renewing concerns over the outlook for the bloc’s largest economy.
The data came one day after European Central Bank President Mario Draghi warned that “downside risks to the economic outlook prevail” after the central bank kept its benchmark interest rate unchanged at a record low 1%.
In the U.S., official data indicating that initial jobless claims fell to the lowest level in nearly four years last week supported expectations that the Federal Reserve will hold off on implementing fresh monetary easing measures.
The Department of Labor stated the number of individuals filing for initial jobless benefits in the week ending March 31 fell to a seasonally adjusted 357,000, the lowest since April 2008 and slightly short of expectations for a decline to 355,000.
The euro was also lower against the pound and the yen, with EUR/GBP giving back 0.18% to hit 0.8256 and EUR/JPY plunging 0.74% to hit 107.61.
Meanwhile, investors were anticipating Friday’s U.S. data on non-farm payrolls, ahead of the long Easter holiday weekend.
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