The euro showed mixed trading against its major counterparts in the European session on Thursday, after the European Central Bank left its key interest rates unchanged amid a worsening economic outlook.
The Governing Council maintained the main refi rate at 4.5 percent and the deposit rate at 4.00 percent. The marginal lending facility rate is at 4.75 percent.
The ECB said that its past interest rate increases would be transmitted forcefully into financing conditions, thereby dampening demand and pushing down inflation.
The central bank reiterated that the key interest rates are at levels that, maintained for a sufficiently long duration, will make a substantial contribution to the inflation target.
The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction, the ECB stressed.
The ECB added that its future decisions would be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
The euro recovered to 1.0559 against the greenback, from an early 10-day low of 1.0521. The currency may find resistance around the 1.07 level.
The euro dropped to 0.9455 against the franc and 0.8698 against the pound, down from an early 2-day high of 0.9494 and a 6-day high of 0.8734, respectively. The currency is poised to challenge support around 0.94 against the franc and 0.85 against the pound.
The euro held steady against the yen, after dropping to a 1-week low of 157.99 at 2:45 am ET. At yesterday’s close, the pair was valued at 158.68.