The euro was trading lower against the dollar and the pound on Thursday after the European Central Bank decided to hold its interest rate unchanged at a record of 0.50 percent.
The European Central Bank left its interest rates unchanged for the third consecutive month in August amid some improvement in economic indicators, which is in line with its expectation of a gradual recovery later this year.
The Governing Council led by ECB President Mario Draghi left the main refinancing rate steady at a record low 0.50 percent as expected. The rate was slashed by quarter-basis point in May, the first rate cut in nine months.
The bank also held the marginal lending facility rate at 1 percent, following a 50 basis points cut in May. The zero deposit rate was also left unchanged.
At the same time, the Eurozone manufacturing sector expanded for the first time since July 2011, survey data from Markit Economics showed today. The Purchasing Managers' Index rose to 50.3 in July, from 48.8 in June and above the flash estimate of 50.1.
As widely expected, the Monetary Policy Committee headed by Mark Carney retained the asset purchase facility at GBP 375 billion and interest rate at a record low 0.50 percent.
In the U.K., the seasonally adjusted Markit/Chartered Institute of Purchasing & Supply Purchasing Manager's Index rose more-than-expected to 54.6 in July from a revised reading of 52.9 in June. The index reading was forecast to improve to 52.8 from June's originally estimated level of 52.5.
The U.S. Federal Reserve on Wednesday kept its ultra-loose monetary policy intact, voicing concerns over the recent rise in mortgage rates and low inflation. There was no language in the Fed's post-statement meeting that would suggest that the $85 billion a month asset-purchase program may be scaled back in the next few months.
The official purchasing managers' index (PMI) in China rose to 50.3 in July from 50.1 in the previous month, while a separate HSBC PMI survey showed factory activity shrank for a third straight month to its lowest level in 11 months. The headline PMI index fell to 47.7 from 48.2 in June.
The U.S. weekly jobless claims report showed that initial jobless claims fell to 326,000, a decrease of 19,000 from the previous week's revised figure of 345,000. The decrease surprised economists, who had expected jobless claims to edge up to 345,000 from the 343,000 originally reported for the previous week.
The euro slipped to a 2-day low of 0.8678 against the pound around 8:30 am ET, pulling back from Asian session's fresh 4-month high of 0.8768. The near-term support for the euro is seen around the 0.8660 level, at which the 10-day EMA lies in the currency cross.
The euro dropped below the key 1.32 level against the US dollar, falling to a weekly low of 1.3192 by 8:30 am ET. The euro-greenback pair is presently hovering around the 1.32 level with 1.3165 seen as the next likely support level.
The common currency held steady against the Swiss franc and the yen after the ECB rate decision. The euro-franc pair was trading in a range of 1.2310 and 1.2330 and the euro-yen pair was trading between 130.80 and 130.40.
news.instaforex.com
2013-8-1 17:47