- The euro rose to one-week highs against the dollar on Thursday after European Central Bank President Mario Draghi said the euro zone will not slide into deflation, after the bank left rates on hold.

EUR/USD hit 1.3613, the highest since January 30 and was last up 0.58% to 1.3611.

The pair was likely to find support at 1.3500 and resistance at 1.3640.

The euro strengthened after Draghi said the ECB sees a protracted period of low inflation, not full blown deflation, reiterating that the bank is “monitoring developments closely".

The recent slowdown in inflation is partly due to lower energy costs, he said, adding that the recovery in the euro area is "still fragile and still uneven".

The remarks came after the ECB voted to leave interest rates across the euro zone unchanged at their record low of 0.25%. It also left the deposit rate unchanged at zero and the marginal lending rate, which banks pay to borrow from the ECB, unchanged.

Draghi firmly reiterated the ECB''s forward guidance, saying that rates will maintain at their current record levels, or lower, for an extended period, and said the bank could take further decisive action if necessary.

He also said domestic demand should improve, while survey data indicated that the recovery in the euro zone was continuing. Risks to recovery remain on the downside, he said, adding that uncertainties in emerging markets could affect future economic conditions.

In the U.S., data on Thursday showed that the number of people who filed for unemployment assistance last week fell more-than-expected.

The Labor Department said initial jobless claims fell by 20,000 to 331,000 from the previous week’s revised total of 351,000. Analysts had expected jobless claims to fall by 16,000.

The euro rose to three-week highs against the pound, with EUR/GBP advancing 0.54% to 0.8341, up from 0.8296 on Wednesday.

The Bank of England left interest rates unchanged at record lows of 0.5% following its meeting on Thursday, where they have been unchanged since March 2009.

The bank also made no change to its quantitative easing program, which remains at 375 billion pounds.

The euro also gained ground against the yen, with EUR/JPY up 0.43% to 137.87.

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