The euro traded close to session lows against the US dollar on Thursday, after on Wednesday FOMC left its loose monetary policy without change, while investors turned their attention to the policy statement by the European Central Bank, scheduled later today.
EUR/USD slid to its lowest point during the current session at 1.3245 at 7:00 GMT, as minutes later the cross traded at 1.3250, still down by 0.40%. Support was likely to be received at July 25th low, 1.3166, while resistance was to be encountered at June 19th high and also a four-month high, 1.3416.
At its two-day meeting ended yesterday the Federal Open Market Committee introduced no changes in the course of monetary policy, leaving interest rates at its current level close to zero. The statement provided no new indications on the conditions for maintaining the pace of bond purchases and repeated the pledge that policymakers have made to continue stimulus until the jobs outlook in the country has improved considerably.
“The committee recognizes that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term,” the Federal Open Market Committee said today, cited by Bloomberg. Growth is expected to “pick up from its recent pace.” Committee experts believed that slow inflation may be a result of seasonal factors. Additionally, Chairman Ben Bernanke cited the “further improvements” in US labor market, while in the mean time economic growth was going at a “modest” pace, but he did not indicate the timing for a scale back to central banks bond purchases.
The United States was expected to release data on ISM Manufacturing later in the trading day, as well as the weekly report on initial jobless claims.
Meanwhile, the sentiment on the euro was fragile ahead of European Central Banks upcoming policy statement, while Spain, Italy, Germany and France were expected to publish information on their manufacturing PMIs during the month of July.
Elsewhere, the euro was slightly lower against the British pound, as EUR/GBP was trading at 0.8740 at 7:37 GMT, down by 0.10%. EUR/JPY, on the other hand, rose by 0.31%, trading at 130.63 at 7:40 GMT.