- POSTED: 10 Jan 2014 06:47
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The euro pushed higher against the dollar late Thursday, reversing earlier losses that came after the European Central Bank pledged action to ward off deflation or a credit crunch.
NEW YORK: The euro pushed higher against the dollar late Thursday, reversing earlier losses that came after the European Central Bank pledged action to ward off deflation or a credit crunch.
The euro dropped sharply from about $1.3627 to below $1.3570 minutes after ECB President Mario Draghi acknowledged continuing worries about the threat of deflation in the eurozone, with the ECB pledging decisive action if conditions worsen.
But at 2200 GMT the euro was back up to $1.3606. compared to $1.3571 late Thursday.
The euro also gained on the Japanese currency, to 142.58 yen from 142.26 yen, while the dollar slipped to 104.79 yen from 104.82 yen.
There was caution ahead of Friday's release of US jobs data for December, with analysts expecting a possible upside surprise on the number of jobs created.
Both the ECB and the Bank of England kept their benchmark rates in place on Thursday, with the ECB focusing on downside risks.
"The recovery is there, but it is weak, modest and fragile," Draghi said.
That means "there are several risks - financial, economic, geopolitical, political - that could undermine easily this recovery," he said.
"Overall, we remain determined to maintain the high degree of monetary accommodation and to take further decisive action if required."
David Song, currency analyst at DailyFX, said low inflation worries in the United States could be playing a role in the dollar's value as well.
"The ongoing improvement in the labor market may prompt the (Federal Reserve's) Federal Open Market Committee to take a more aggressive approach in normalizing monetary policy," said Song.
"But a further slowdown in wage growth may encourage the central bank to further delay its exit strategy amid the threat for disinflation."
The British pound edged higher to $1.6482 from $1.6447.
The dollar fell to 0.9066 Swiss franc from 0.9111 franc.