The euro was steady against the dollar on Wednesday, holding above 14 month lows after data showed that business confidence in Germany continued to deteriorate this month and after the European Central Bank reiterated its commitment to accommodative monetary policy.
The pair was likely to find support at 1.2815 and resistance at around the 1.29 level.EUR/USD was trading at 1.2850, hovering just above Monday’s 14-month trough of 1.2815.
The euro was little changed after a report showed that Germany's Ifo business confidence index deteriorated for the fifth successive month in September.
The Ifo economic institute's business climate index fell to 104.7 from 106.3 in August.
It was the lowest level since April 2013 and much weaker than economists’ forecasts for 105.7.
The report came one day after data showed that German private sector output continued to expand in September but growth in the manufacturing sector slowed to a 15 month low.
The data added to fears that the euro zone’s largest economy is losing momentum.
Earlier Wednesday, ECB President Mario Draghi said the bank will keep its monetary policy “accommodative” for as long as needed, and will use every tool at its disposal to fight deflation.
“Monetary policy will remain accommodating for a long time and I can tell you that the Governing Council is unanimous in committing itself to using the tools at its disposal to bring inflation back to just under 2%.”
Interest rates will remain low because they can’t get much lower,” he said.
The ECB unexpectedly cut rates to record lows across the euro zone earlier this month, in a bid to address slowing inflation.
Demand for the dollar continued to be underpinned after data on Tuesday showed that the U.S. manufacturing sector expanded in September, matching the rate of growth seen in the previous month, which was the strongest in over four years.
The data added to the view that the ongoing economic recovery in the U.S. could prompt the Federal Reserve to raise interest rates sooner than markets expect.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was steady at 84.80, not far from Monday’s four year highs of 84.86.
Elsewhere, the euro was lower against the yen, with EUR/JPY down 0.26% to 139.51.
The yen found support on Wednesday after Japanese Prime Minister Shinzo Abe voiced concerns over the economic impact of recent weakness in the currency.
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