Demand for dollar supported ahead of US economic reports, euro slips lower

On Thursday the single currency slipped lower against its US counterpart, as demand for the latter slightly strengthened ahead of a string of U.S. economic reports.

EUR/USD hit 1.1313 during European afternoon trade, the pair's lowest since Tuesday; the pair subsequently consolidated at 1.1317, declining 0.38%. Cable was likely to find support at 1.1223, the low of January 27 and resistance at 1.1430, the high of February 20.

The common currency shrugged off a report by Germany's Federal Statistics Office indicating that the number of the unemployed dropped by 20,000 this month, compared to expectations for a drop of 10,000. Jobless claims decreased by 10,000 in January, whose figure was revised from a previously reported fall of 9,000.

The report added that Germany’s unemployment remained stable at 6.5% in February, unchanged from January and in line with expectations.

Other data showed that the German Gfk consumer climate index rose to 9.7 from 9.3 in January, slightly ahead of forecasts of 9.6.

Investors still remained cautious amid lingering doubts over the agreement to extend Greece’s bailout as both the International Monetary Fund and the European Central Bank warned that the country's reform plans are not detailed enough.

In the meantime, sentiment on the dollar remained vulnerable after Federal Reserve Chair Janet Yellen said in testimony to the Senate Banking Committee Tuesday that it was "unlikely" that economic conditions would warrant an interest rate increase for "at least the next couple of FOMC meetings".

On Wednesday Yellen reiterated this message, saying that wage growth and inflation must rise before the bank can hike rates, despite signs of improvement in the labor market.

The euro was also lower against the pound, with EUR/GBP edging down 0.14% to 0.7306.

In the U.K., the Office for National Statistics earlier reported that the gross domestic product expanded by 0.5% in the final three months of 2014, unchanged from an initial estimate and in line with expectations. The U.K.’s economy grew by 0.7% in the previous quarter. The U.K. economy expanded at an annualized rate of 2.6% in the third quarter of 2014.

Investors expect the U.S. to release data on the consumer price index, as well as reports on initial jobless claims and durable goods orders.