The euro continued to be lower on Thursday, after the European Central Bank President Mario Draghi indicated that Governing Council would reassess the degree of monetary policy accommodation at December policy meeting, as slowing growth prospectus in emerging markets and possible repercussions from developments in financial and commodity markets could pose downside risks to eurozone economy.
In his customary post-decision press conference, Draghi vowed that he is ready to adjust the size, composition and duration of the asset purchase programme at the December monetary policy meeting, when the new Eurosystem staff macroeconomic projections will be out.
Draghi stressed that the bank would continue to fully implement the monthly asset purchases of ?60 billion, which will run until the end of September 2016, or beyond, if necessary, as the ECB aims to achieve inflation rates below, but close to, 2 percent over the medium term.
The Governing Council is willing and able to act by using all the instruments available within its mandate, including a cut in deposit rate into further negative, he added.
In the meeting in Malta, the Governing Council held the refinancing rate at a record low of 0.05 percent. The bank also kept the deposit rate unchanged at -0.20 percent and the marginal lending rate at 0.30 percent. The decision was in line with economists’ expectations.
The euro has been lower during the day, as investors cautiously awaited the ECB decision amid concerns about chronically weak inflation plaguing the region.
The euro lost 1.4 percent to hit more than a 2-week low of 1.1179 against the greenback, from Wednesday’s closing value of 1.1338. The next possible support for the euro may be located around the 1.10 region.
Data from the Labor Department showed a modest increase in initial jobless claims in the week ended October 17th, although the uptick was smaller than economists had expected.
The report said initial jobless claims edged up to 259,000, an increase of 3,000 from the previous week’s revised level of 256,000.
The 19-nation currency depreciated to 0.7249 against the Sterling, its weakest since September 23, and was down by 1.39 percent from yesterday’s closing quote of 0.7351. The euro is poised to challenge support around the 0.715 level.
Data from the Office for National Statistics showed that U.K. retail sales climbed at a faster-than-expected pace in September.
Retail sales including automotive fuel grew 1.9 percent month-over-month in September, exceeding economists’ expectations for a 0.4 percent rise.
After climbing to a weekly high of 1.0899 against the Swiss franc at 6:15 am ET, the euro reversed direction and reached as low as 1.0847. The pair was valued at 1.0878 when it ended Wednesday’s trading. On the downside, the euro may find support around the 1.075 mark.
The euro plunged 1.59 percent to near a 3-week low of 134.36 against the Japanese yen, compared to 135.95 hit late New York Wednesday. Continuation of the euro’s downtrend may dive it down to a support around the 133.00 area.
The euro slid to a 2-day low of 1.4662 against the loonie, near 3-month low of 1.6503 against the kiwi and a 3-day low of 1.5524 against the aussie, off its early highs of 1.4907 and 1.6916, and an 8-day high of 1.5791, respectively. The euro is seen challenging support around 1.44 against the loonie, 1.62 against the kiwi and 1.52 against the aussie.
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