Forexpros – The euro erased losses against the U.S. dollar on Thursday, after the European Central Bank cut interest rates, but uncertainty over the outcome of a decisive European Union summit continued to weigh.
EUR/USD pulled away from 1.3379, the daily low, to hit 1.3417 during European afternoon trade, inching up 0.04%.
The pair was likely to find support at 1.3332, Tuesday’s low and resistance at 1.3485, the high of December 5.
The ECB cut its benchmark interest rate by 0.25%, bringing rates to a record low 1% in a bid to shore up economic growth in the euro zone.
But investors remained jittery over the outcome of a critical EU summit aimed at reaching a breakthrough on an agreement to arrest the spread of the debt crisis in the shared currency zone.
European leaders were beginning a two-day summit in Brussels to discuss proposed changes to EU treaties which would allow for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc, clearing the way for the ECB to play a bigger role in stabilizing euro zone bond markets.
The euro remained lower against the pound, with EUR/GBP slipping 0.11% to hit 0.8525.
Later Thursday, ECB President Mario Draghi was to hold a press conference to discuss the bank’s latest rate decision, while the U.S. was to release official data on initial jobless claims.
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