Forexpros – The euro pared losses against the U.S. dollar on Thursday, following upbeat remarks from European Central Bank President Mario Draghi, but gains were limited after the release of mixed U.S. economic data.
EUR/USD pulled back from 1.3094, the pair’s lowest since April 19, to hit 1.3156 during U.S. morning trade, down just 0.01% on the day.
The pair was likely to find support at 1.3094, the session low and resistance at 1.3209, the high of April 23.
The euro found support after ECB chief Mario Draghi said that policymakers did not discuss an interest-rate cut at their monthly meeting earlier, when the bank left its benchmark interest rate unchanged at 1%, in a widely expected decision.
Draghi also refrained from pledging more liquidity boosting measures, saying that the bank’s long-term financing operations needed time to work
The comments came after an auction of Spanish government debt which met with solid investor demand but saw the country’s short-term borrowing costs rise sharply.
Spain sold the full targeted amount of EUR2.5 billion of government bonds in its first debt sale since being downgraded by Standard & Poor’s, but the yield on the country’s five-year bonds rose to 4.96% from 3.69%, while the yield on three-year bonds climbed to 4.03% from 2.61%.
Meanwhile, in the U.S., official data showed that the number of people who filed for unemployment assistance last week fell by the most since May 2011.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 28 fell by 27,000 to a seasonally adjusted 365,000, beating expectations for a decline to 380,000.
The previous week’s figure was revised up to 392,000 from 388,000.
But a separate report from the Institute of Supply Management showed that service sector activity in the U.S. slowed to the lowest level in six months in April.
The ISM said its non-manufacturing purchasing manager’s index declined by 2.5 points to 53.5 in April from a reading of 56.0 in March.
The euro pushed higher against the pound and the yen, with EUR/GBP adding 0.11% to hit 0.8130 and EUR/JPY rising 0.19% to hit 105.65.
Also Thursday, preliminary data showed that U.S. non-farm productivity fell broadly in line with expectations in the first quarter, while unit labor costs rose less-than-expected.
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