Forexpros – The euro erased gains against the U.S. dollar on Thursday, after European Central Bank President Mario Draghi said the central bank may undertake market operations to lower Spanish and Italian bond yields, but declined to give specific details.
EUR/USD pulled back from 1.2401, the pair’s highest since July 5; the pair subsequently consolidated at 1.2213, slipping 0.10%.
The pair was likely to find support at 1.2052, the low of July 25 and an almost two-year low and resistance at 1.2335, Wednesday’s high.
Draghi said the ECB may undertake bond purchases in order to bring down the “exceptionally high” borrowing costs of stressed euro zone members, but provided no explicit details on how and when these activities may be carried out.
The ECB will work out the details of the bond buying program “over the coming weeks”, Draghi said, adding that the operation would be of a size “adequate to meet its objectives”.
The statement disappointed market expectations for bold steps to counter the debt crisis in the euro zone, which have been building since Draghi pledged last week to do whatever is necessary to preserve the euro.
The ECB left interest rates unchanged at a record low 0.75% earlier.
The yield on Spanish 10-year bonds was climbed to 6.8% following the ECB press conference, after falling to an intra-day low of 6.64% earlier.
The euro was also lower against the pound and the yen, with EUR/GBP down 0.23% to 0.7851 and EUR/JPY down 0.45% to 95.46.
In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week rose to a seasonally adjusted 365,000, from an upwardly revised 357,000 in the preceding week.
Analysts had expected initial jobless claims to rise to 370,000 last week.
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