Forexpros – bsp;Forexpros – The euro plunged against the U.S. dollar on Thursday after European Central Bank President Mario Draghi signaled lack of support for ailing euro zone nations.
EUR/USD plummeted to a low of 1.3288 during early U.S. trade prior to settling at 1.3321 falling 0.72% mid session.
The pair was likely to find support at 1.3301, and resistance exists at 1.3364.
The euro showed strength in early U.S. trade prior to the expected 25 basis point interest rate cut to 1% and bearish signals from the European Central Bank.
Once the market digested the rate cut, Central Bank President Mario Draghi failed to signal support of ailing economies by bond purchases. He also stated that he could not circumvent a treaty that prevents the ECB from providing monetary funding to the International Monetary Fund.
On the optimistic front, the ECB did reveal new liquidity measures, the easing of collateral requirements for loans and a reduction of reserve requirements for commercial loans.
The euro was also lower against the pound, with EUR/GBP slipping 0.11%.
Investors are anxiously awaiting the results of a two day European Union summit, designed to end the debt crisis.
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