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Forex - EUR/USD holds steady ahead of ECB statement

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Investing.com -

Investing.com - The euro held steady against the U.S. dollar on Thursday, still trading near three-and-a-half month lows as investors remained cautious ahead of the European Central Bank's policy statement, expected later in the day.

EUR/USD hit 1.3640 during late Asian trade, the session high; the pair subsequently consolidated at 1.3605, inching up 0.04%.

The pair was likely to find support at 1.3562, the low of February 12 and resistance at 1.3668, the high of May 27.

Sentiment on the euro remained vulnerable after data earlier in the week showed that consumer price inflation in the euro zone increased by 0.5% last month, down from 0.7% in April.

The rate missed expectations for a reading of 0.7% and stands well below the ECB target of near but just under 2%.

The report added to expectations that the ECB will take steps to tackle low consumer price growth, which is threatening the fragile recovery in the euro zone.

The greenback found support after the Institute of Supply Management on Wednesday said its non-manufacturing index rose to a nine-month high of 56.3 in May, from a reading of 55.2 the previous month, compared to expectations for a rise to 55.5.

However, market participants awaited Friday's report on U.S. nonfarm payrolls for further indications on the strength of the U.S. job market after a data on Wednesday showed that private sector jobs rose less than expected last month.

Payroll processing firm ADP said non-farm private employment rose by 179,000 in May, below expectations for an increase of 210,000. April's figure was revised down to a gain of 215,000 from a previously reported increase of 220,000.

The euro was little changed against the pound, with EUR/GBP inching down 0.01% to 0.8123.

Later in the day, the ECB was to announce its benchmark interest rate, followed by a press conference with President Mario Draghi. The U.S. was to publish the weekly report on initial jobless claims.

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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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