NEW YORK: The euro only barely rebounded against the dollar in late trade Thursday, after plunging on the European Central Bank's sharp cut in its eurozone growth forecast for next year.
The euro lost more than one cent after the ECB forecast that the euro area economy will shrink by 0.3 percent in 2013, instead of growing by 0.5 percent as previously estimated.
Also pressing it lower were hints from the ECB that it might be moving toward cutting its benchmark rate, even as it held firm on Thursday.
"The ECB appears to have the door open for an interest rate cut, and we expect it to step through early in 2013," said Howard Archer at IHS Global Insight.
At 2200 GMT, the euro was at $1.2969, compared to $1.3064 late Wednesday. It hit a low of $1.2951 during the day.
There was nothing otherwise to budge the dollar, with trade mostly on hold for Friday's US jobs data for November, expected to be down due to Hurricane Sandy's impact on the economy of the northeast corridor.
If anything, the data will support expectations that the Federal Reserve will further extend its bond purchase stimulus program when it meets next week.
The yen picked up slightly, 10 days before national elections in Japan. It gained to 106.85 yen to the euro from 107.71, and 82.37 yen to the dollar from 82.42.
The dollar rose to 0.9325 Swiss francs, and the British pound slipped to $1.6050.
-AFP/ac
ECB forecast, rate hints send euro lower
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ECB forecast, rate hints send euro lower
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ECB forecast, rate hints send euro lower
