Investing.com - The euro pulled back from session highs against the dollar on Thursday, but remained stronger after comments by Federal Reserve Chairman indicated that that the bank may not be as close to tapering its asset purchase program as previously thought.
EUR/USD pulled back from 1.3206, the pair’s highest since June 21, to hit 1.3064 during European afternoon trade, still up 0.65% for the day.
The pair was likely to find support at 1.2961, the session low and resistance at 1.3253, the high of June 21.
The dollar regained some ground as recent signs that the U.S. economy is improving supported expectations that the Fed will soon start to taper its asset purchase program.
The greenback fell sharply against all the major currencies earlier Thursday after Bernanke said the Fed will continue to maintain accommodative monetary policy for the foreseeable future, citing low levels of inflation and the high unemployment rate.
Bernanke said the bank will not raise interest rates until the U.S. unemployment rate hits 6.5%.
The comments came after the minutes of the central bank’s June policy meeting showed that Fed policymakers remain divided over when to begin tapering its USD85 billion-a-month asset purchase program.
Around half of Fed policymakers believe the bank should start to scale back bond purchases by the end of the year, while many others believe the labor market still remains too weak.
The European Central Bank’s monthly bulletin said Thursday that the extended period of time the bank expects interest rates to remain at present or lower levels is “flexible” and indicated that further rate cuts are possible.
Elsewhere, the euro was slightly lower against the pound, with EUR/GBP slipping 0.10% to 0.8630 and was higher against the yen, with EUR/JPY rising 0.19% to 129.53.
The U.S. was to release the weekly report on initial jobless claims later in the trading day.
