Euro Higher As ECB Retains Key Interest Rates

The euro was higher against its major counterparts in the European session on Thursday, after the European Central Bank left its key interest rates unchanged and said that the increased bond buying will continue to be conducted during the current quarter.

The Governing Council maintained the main refi rate at a record low of zero percent and the deposit rate at -0.50 percent. The marginal lending facility rate is at 0.25 percent.

The Governing Council retained the pandemic emergency purchase programme at EUR 1.85 trillion.

The purchases under the PEPP will continue to be conducted at a significantly higher pace over the current quarter than during the first months of the year.

"The Governing Council will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions that is inconsistent with countering the downward impact of the pandemic on the projected path of inflation," the bank said.

Net asset purchases under the PEPP will be conducted until at least the end of March 2022 and, in any case, until the Governing Council judges that the coronavirus crisis phase is over.

Proceeds from maturing securities under PEPP will be reinvested until at least the end of 2023.

European stocks rose amid continued optimism about earnings and hopes that a momentum shift in vaccination drive will help curb the spread of the Covid-19 pandemic.

The currency showed mixed trading against its major counterparts in the Asian session. While it rose against the greenback, it held steady against the franc and the pound. Versus the yen, it fell.

The euro bounced off to 1.1037 against the franc, from a low of 1.1014 seen at 4:30 am ET. The euro is likely to face resistance around the 1.13 region, if it gains again.

Data from the Federal Customs Administration showed that Switzerland's exports grew in the first quarter.

Exports increased 4.9 percent sequentially in the first quarter, while imports grew 1.9 percent.

The euro was up against the pound, at a 6-day high of 0.8689. The euro-pound pair had finished yesterday's trading session at 0.8639. On the upside, 0.88 is likely seen as its next resistance level.

Survey results from the Confederation of British Industry showed that UK manufacturing orders grew at the fastest pace in two years and the optimism among manufacturers rose the most since 1973.

The order book balance rose to +5 percent in three months to April from -12 percent in January, the latest Industrial Trends survey revealed. This was the biggest growth since April 2019.

The euro appreciated to a 2-day high of 130.38 against the yen from Wednesday's close of 130.04. The euro is seen finding resistance around the 133 level.

The euro remained higher against the greenback, at a 2-day high of 1.2059. The pair had closed Wednesday's deals at 1.2034. The currency is likely to locate resistance around the 1.22 level.

The single currency ticked up to 1.5582 against the aussie and 1.6791 against the kiwi, compared to yesterday's closing values of 1.5510 and 1.6675, respectively. Further rally may take the euro to resistance levels of around 1.57 against the aussie and 1.72 against the kiwi.

The European currency was trading at 1.5057 per loonie, up from yesterday's trading close of 1.5037. Immediate resistance for the currency is seen around the 1.52 level.

Looking ahead, U.S. existing home sales for March are scheduled for release at 10:00 am ET.

At the same time, Eurozone flash consumer sentiment index for April is due.