Investing.com

Investing.com - The euro was trading close to session lows against the dollar on Wednesday after senior European Central Bank official said the bank is seriously considering negative deposit rates.



EUR/USD hit 1.3564, the lowest since Friday, and was last down 0.48% to 1.3571.



The pair was likely to find support at 1.3550 and resistance at 1.3651, the session high.



The drop in the euro came after ECB Executive Board member Benoit Coeure said in an interview with Reuters that the bank is considering a negative deposit rate very seriously.



He added that the ECB does not see deflation in the euro area, adding that the bank sees low inflation, which should increase slowly back to its 2% target.



The ECB voted to leave interest rates across the euro zone unchanged at their record low of 0.25% last week. However, ECB head Mario Draghi reiterated that the bank could take further decisive action if necessary.



The common currency was sharply lower against the pound, with EUR/GBP dropping 0.88% to 0.8214, the weakest level since February 3.



Sterling was boosted after the Bank of England outlined a new forward guidance policy on Wednesday and upgraded its forecast for economic growth this year.



The BoE indicated that it will keep interest rates on hold at record lows of 0.5% for at least another year, despite upgrading its U.K. economic growth forecast for 2014 to 3.4% from 2.8%.



The bank said it will not raise rates until the spare capacity in the U.K. economy has been fully absorbed, which it does not see happening until 2015.



The euro was also weaker against the yen, with EUR/JPY falling 0.75% to 138.88, down from session highs 140.05.



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