The greenback was higher against the euro in the Thursday session on a combination of mixed US economic reports and a 50-basis point rate cut by the ECB. Weekly jobless claims were higher than expected, jumping past the 500k figure to 524k and up from a week earlier at 467k. The NY Fed manufacturing survey improved by more than anticipated to -22.2 in January, versus -25.76 from a month earlier. The Philadelphia Fed business survey improved by more than expected to -24.3 in January versus -36.1 a month earlier.
Economic reports in the coming session include December CPI, industrial production, and net TIC flows.
Euro Retreats on ECB Cut
The ECB, as largely expected, cut its benchmark lending rate by 50-basis points to 2.0%, its lowest level in 3-years. The euro was initially higher following the decision, rallying past the 1.32-handle, but subsequently relinquishing the 1.31-level to fall toward 1.3060.
Bank President Trichet raised the prospects for additional ECB rate cuts over the coming months in his press conference today. Trichet tempered expectations for a move in February but left the door open for another rate cut in March. He offered a downbeat assessment on the Eurozone economy, expecting weakness to persist in the coming quarters, with risks to growth on the downside.
EURUSD will encounter support at 1.3030, followed by 1.30 and 1.2950. Additional floors are seen at 1.29, backed by 1.2860 and 1.2830. On the upside, gains will target resistance at 1.3080, 1.3120 and 1.3170. Subsequent ceilings are seen at 1.32, backed by 1.3240 and 1.3270.