Euro Down After Smaller ECB Rate Hike

(RTTNews) - The euro came under pressure in the European session on Thursday, as the European Central Bank slowed the pace of its interest rate hikes and indicated that future moves would be based on economic data.

The Governing Council raised key interest rates by 25 basis points, bringing the main refinancing rate to 3.75 percent, the deposit facility rate to 3.25 percent and the marginal lending rate to 4.00 percent. The move was in line with economists' expectations.

The ECB said it would discontinue the reinvestments under the asset purchase programme, starting in July.

"The Governing Council's future decisions will ensure that the policy rates will be brought to levels sufficiently restrictive to achieve a timely return of inflation to the 2% medium-term target and will be kept at those levels for as long as necessary," the ECB said.

The central bank would continue to follow a data-dependent approach to assess the appropriate level and duration of the restriction.

"The Governing Council's policy rate decisions will continue to 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 ECB added.

Data from Eurostat showed that Eurozone producer price inflation eased further in March to the lowest level in two years amid a sharp slowdown in the price growth of energy.

The producer price index posted an annual increase of 5.9 percent in March, much slower than the 13.3 percent spike in February. That was in line with economists' expectations.

The euro was down against the greenback, at 1.1001. The pair was worth 1.1059 when it closed deals on Wednesday. Further drop in the currency may face support around the 1.08 level.

The euro touched 0.9751 against the franc, its lowest level since March 15. At Wednesday's close, the pair was worth 0.9778. Next key support for the euro is seen around the 0.96 mark.

The euro depreciated to a 6-day low of 147.56 against the yen from yesterday's close of 148.99. The euro is seen finding support around the 143.00 level.

The euro fell to a 4-week low of 0.8758 against the pound from Wednesday's close of 0.8803. The euro is likely to challenge support around the 0.86 region.

The euro edged down to 1.6497 against the aussie, from a 3-day high of 1.6668 seen at 8 pm ET. The euro-aussie pair had finished deals at 1.6578 on Wednesday. Should the euro falls further, it is likely to test support around the 1.60 region.

The euro weakened to near a 3-week low of 1.7567 against the kiwi, reversing from a 3-day high of 1.6668 it logged at 6:30 pm ET. At yesterday's trading close, the pair was quoted at 1.7748. On the downside, 1.72 is possibly seen as its next support level.

The euro dropped to a 2-day low of 1.4945 against the loonie, from an 8-day high of 1.5098 hit at 8 pm ET. The euro was trading at 1.5056 against the loonie at yesterday's close. The euro may face support around the 1.46 level, if it falls again.