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Forex - EUR/USD hits 4-day low after Trichet, U.S. data

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Forex Pros - The euro slumped to a four-day low against the U.S. dollar on Thursday, after European Central Bank President Jean-Claude Trichet pointed to a rate hike in July that was already priced in by investors.

EUR/USD pulled away from 1.4649, the daily high to hit 1.4494 during European afternoon trade, shedding 0.61%.

The pair was likely to find support at 1.4306, the low of June 2 and resistance at 1.4694, Wednesday's high and a one-month high.

Speaking after the ECB's policy setting meeting, Trichet said evidence since the bank's May meeting confirmed "continued upward pressure on overall inflation mainly owing to commodities and energy prices."

Trichet said "strong vigilance" on inflation was warranted after the bank kept interest rates on hold at 1.25%.

Meanwhile, concerns over Greek sovereign debt continued to cast a pall over the single currency. Trichet reiterated the ECB's opposition to restructuring, saying "We exclude all concepts which would not be purely voluntary. We call for avoiding any credit event and selective default".

Elsewhere, the U.S. Commerce Department said the trade deficit declined 6.7% to USD43.68 billion in April, from a downwardly revised USD46.82 billion the month before. The March trade gap was originally reported as USD48.18 billion.

The euro was also lower against the pound, with EUR/GBP shedding 0.34% to hit 0.8858.

Also Thursday, the U.S. Department of Labor said initial unemployment claims increased by 1,000 to a seasonally adjusted 427,000 in the week ended June 4. The prior week's figure was revised to 426,000 from an originally reported 422,000.

Analysts had expected claims to fall to 423,000 last week.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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