The euro erased gains against the dollar on Thursday after European Central Bank President Mario Draghi reinforced the bank’s forward guidance on rates and said the bank was still ready to take "further decisive action" if needed.

EUR/USD pulled away from session highs of 1.3656, and was last down 0.11% to a one-month low of 1.3554.

The pair was likely to find support at 1.3500 and resistance at 1.3656.

The drop in the euro came after Draghi reiterated that monetary policy will remain accommodative for as long as is needed in order to assist the economic recovery in the euro area. The ECB expects interest rates to remain at present or lower levels for an extended period of time, he said.

Draghi said the ECB would act if there was unwarranted short term tightening in the money markets, or if the outlook for inflation worsened in the medium term, saying the ECB would consider "all possible instruments" to tackle these contingencies.

The euro area may experience a prolonged period of low inflation, before inflation rises back towards the ECB''s target of close to, but below 2% Draghi said. The bank expects inflation to remain around current levels during the coming months.

Draghi said the slowdown in the annual rate of euro zone inflation in December was generally expected, and was due, in part, to changes in German data.

The euro fell to one-year lows against the pound, with EUR/GBP down 0.19% to 0.8237.

Elsewhere, the shared currency gave up gains against the yen, slipping 0.11% to 142.18, down from session highs of 143.04.

In the U.S., the Labor Department said Thursday the number of people who filed for unemployment assistance last week fell by 15,000 to 330,000 from the previous week’s revised total of 345,000.

Economists had expected jobless claims to decline by 10,000.

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