Investing.com

Investing.com - The euro rose to its highest level this year against the dollar on Thursday after European Central Bank President Mario Draghi refrained from tightening monetary policy, but reiterated that the central bank is ready to act if necessary.



EUR/USD hit 1.3855, the highest level since December 27 and was last up 0.77% to 1.3838.



The pair was likely to find support at 1.3720, the session low and resistance at 1.3890.



The euro was boosted after Mario Draghi confirmed that the bank left its benchmark interest rate unchanged at 0.5%, with the latest economic data indicating that “the moderate economic recovery in the euro zone is proceeding.”



The ECB president said he was encouraged by data on Wednesday showing that business activity in the euro zone rose to a 32-month high last month, and noted an improvement in the services sector, which accounts for the majority of job growth.



Draghi reiterated the ECB’s forward guidance on rates, saying that interest rates will remain at their present levels, or lower for an extended period. The ECB remains determined to maintain the high degree of accommodative monetary policy for as long as needed, and will take further actions as it sees fit, he said.



The central bank revised its forecast for economic growth in 2014 to 1.2% from 1.1% in December.



However, the bank revised down its inflation forecast for this year to 1.0% from 1.1% in December. The bank expects inflation to pick up to 1.3% in 2015 and 1.5% in 2016, remaining below the bank’s target of just under 2%.



In the U.S., the Department of Labor said the number of individuals filing for initial jobless benefits last week fell by 26,000 to 323,000 from the previous week’s revised total of 349,000.



Analysts had expected jobless claims to fall by 11,000 to 338,000 last week.



A separate report showed that U.S. factory orders fell 0.7% in February, compared to expectations for a 0.4% decline.



The euro extended gains against the yen, with EUR/JPY jumping 1.49% to 142.57. The pair fell to lows of 138.77 last week as concerns over the crisis in Ukraine weighed.



Elsewhere, the common currency was also higher against the pound, with EUR/GBP advancing 0.74% to 0.8274.



Earlier Thursday the Bank of England left U.K. interest rates unchanged at their record low of 0.5%, and also left its quantitative easing program steady at 375 billion pounds.



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