- The euro rose to session highs against the dollar on Thursday, following the release of mixed U.S. employment data, but gains were held in check after a report showed that manufacturing activity in the Philadelphia-region expanded at a faster than expected rate this month.

EUR/USD hit session highs of 1.3650 and was last up 0.22% to 1.3634.

The pair was likely to find support at 1.3552, the low of January 8 and resistance at 1.3675.

The U.S. dollar slipped after the Department of Labor said the number of people filing continuing unemployment claims rose back over three million level, increasing to 3.03 million, up from 2.85 million, in the week to January 4.

U.S. employment data is being closely watched by investors since the latest nonfarm payrolls report showed that the economy added just 74,000 news jobs in December, well below expectations for 196,000.

However, the number of initial jobless claims fell by 2,000 last week to a six-week low of 326,000.

Another report showed that the annual rate of consumer inflation in the U.S. rose 1.5% in December, up from 1.2% in November. Consumer prices were 0.3% higher from a month earlier.

Core inflation rose 0.1% from a month earlier in December and was up 1.7% on a year-over-year basis.

Meanwhile, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 9.4 this month from 6.4 in December. Analysts had expected a reading of 8.6. Indicators of future activity moderated, the report said, but continued to indicate general optimism about growth over the next six months.

Earlier Thursday, European Central Bank governing council member Jens Weidmann played down fears over the threat of deflation in the currency bloc, saying the risk of broad deflation was limited.

The comments came as data confirmed the annual rate of consumer inflation remained well below the ECB’s 2% target in December.

Eurostat said consumer price inflation rose 0.8% on a year-over-year basis in December, in line with expectations and unchanged from a preliminary estimate.

The euro fell to session lows against the yen, with EUR/JPY down 0.14% to 142.06, but was higher against the pound, with EUR/GBP up 0.25% to 0.8331.

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