Investing.com - The euro pulled back from two-week lows against the dollar on Thursday after Federal Reserve Chair Janet Yellen acknowledged recent weakness in U.S. data, saying it does point to “softness” in the economy.
EUR/USD pulled away from lows of 1.3643, the weakest since February 13 and was last down 0.03% at 1.3681.
The pair was likely to find support at 1.3600 and resistance at 1.3694, the session high.
In testimony to the Senate banking committee in Washington, Ms. Yellen said it was hard to say how much the recent soft data was due to weather and added that the bank would be attentive to signals on whether the recovery is progressing in line with expectations.
Earlier Thursday, the Commerce Department reported that U.S. durable goods orders declined by a seasonally adjusted 1% last month, compared to expectations for a 1.5% drop.
Core durable goods orders, excluding volatile transportation items, rose 1.1% in January, the largest increase since May, confounding forecasts for a 0.3% decline.
A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week rose more than expected.
The Labor Department said the number of individuals filing for initial jobless benefits rose by 14,000 to 348,000 from the previous week’s total of 334,000. Analysts had expected an increase of just 1,000.
Demand for the greenback continued to be underpinned as political and military tensions between Russia and Ukraine continued after armed men seized government headquarters and the regional parliament in Crimea.
Ukraine’s parliament appointed a new government on Thursday, headed by former economy minister Arseniy Yatsenyuk, after pro-Russian President Viktor Yanukovych was ousted last week.
In the euro zone, official data on Thursday showed that the annual rate of consumer price inflation in Germany slowed to 1.2% in February from 1.3% in January. Analysts had expected the annual inflation rate to remain unchanged.
German consumer prices rose 0.5% in February from a month earlier, below forecasts for a gain of 0.6%.
The lackluster data added to concerns over the threat of deflation in the region, ahead of euro zone inflation data for February, due for release on Friday.
The European Central Bank is to hold its monthly policy meeting next week, amid speculation that it will tighten monetary policy again in order to safeguard the fragile recovery in the region.
Also Thursday, data confirmed that Spain’s economy grew 0.2% in the fourth quarter, below the initial estimate for 0.3% growth.
A separate report showed that lending to households and firms in the euro zone fell in for a second month in January.
Elsewhere, the euro trimmed losses against the yen, with EUR/JPY down 0.41% to 139.50, after falling to two-week lows of 138.80 earlier.