The euro eased off from a 14-month high against the U.S. dollar on Thursday, as investors started booking profits ahead of interest rate decision by the European Central Bank (ECB).
EUR/USD hit a low of 1.4296 during late Asian trading, before consolidating at 1.4297. Near-term support is seen in the $1.4285-1.4250 area.
The single currency also came under pressure with renewed concerns over the euro zone’s sovereign debt crisis, as Portugal became the third country in the region to seek a bailout from the European Union (EU), which is expected to be around 80 billion euro ($114.4 billion).
Analysts said that the currency is well supported by widespread expectations that the ECB would raise interest rate from a record low of 1 percent to 1.25 percent later Thursday, for the first since July 2008.
Eurozone’s inflation stood above the central bank’s target of two percent for the third consecutive month in February.
The euro zone debt crisis has not stopped the ECB from making hawkish comments. That means Portugal's story is not going to stop a rate hike. The market is pricing in 100 bps of rate hikes, but it may be difficult for us to really see that,” Reuters reported, quoting Koji Fukaya, chief FX strategist at Credit Suisse.
The single currency also slipped from an 11-month high against the Japanese yen to hit 121.77.
Earlier on Thursday, the Bank of Japan (BoJ) kept the interest rate unchanged at 0.1 percent and announced new lending programs to recover the economy from the devastating earthquake that hit the country on March 11.