The euro was trading close to session highs against the dollar on Thursday, ahead of the European Central Bank’s first rate announcement for 2014 later in the session.
EUR/USD hit session highs of 1.3656 and was last up 0.27% to 1.3611.
The pair was likely to find support at 1.3552, Wednesday’s low and a one-month low and resistance at 1.3655, the high of January 7.
The euro rebounded against the dollar after falling on Wednesday, following a report showing that the U.S. private sector added the largest number of jobs since November 2012 last month.
ADP nonfarm payrolls rose by 238,000 in December, easily surpassing expectations for an increase of 200,000. The data bolstered the outlook for the recovery in the U.S. labor market going into this year, as investors awaited the government’s jobs report for December, due out on Friday.
Wednesday’s minutes of the Federal Reserves’ December meeting showed that the bank cited a stronger labor market in its decision to cut its asset purchase program by USD10 billion, reducing it to USD75 billion-a-month.
The minutes also showed that officials were keen to stress that further reductions were not on a “preset course” and would be undertaken in “measured” steps.
The euro’s gains were likely to be held in check ahead of the ECB meeting, after data earlier this week showed that the annual rate of inflation in the euro zone slowed to 0.8% in December, from 0.9% in November. The data sparked fresh concerns over the risk of deflation in the region.
Elsewhere, the euro moved higher against the pound, with EUR/GBP rising 0.19% to 0.8269, after falling to one-year lows of 0.8241 on Wednesday.
Demand for sterling continued to be underpinned after recent solid U.K. economic data reinforced expectations that the Bank of England would raise interest rates ahead of other central banks.
The BoE was to announce its interest rate decision later in the trading day.
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