Investing.com - The euro pared gains against the dollar and the yen on Thursday after euro area lenders borrowed less than expected from the European Central Bank under its new low cost loan program.
EUR/USD was last up 0.11% to 1.2870, off session highs 1.2907 and not far from the 14-month lows of 1.2833 struck overnight.
The pair was likely to find support at 1.2833 and resistance at 1.2945.
The euro slipped after the ECB said it allotted €82.6 billion to 255 bidders in its new Targeted Long Term Refinancing Operation, or TLTRO. That was well below the €100 to €150 billion predicted by analysts.
The low loan uptake indicated that the operation will have only a limited impact on boosting liquidity in the euro area.
A second operation will be held in December. The ECB is offering up to €400 billion of cheap liquidity under eight TLTRO operations in order to encourage lenders to offer credit to small businesses and boost inflation in the region.
Sentiment on the single currency was also hit by media reports that ratings agency Moody’s was set to downgrade France by one notch from Aa1 to Aa2. Moody’s was to issue a new rating decision on France on Friday.
The dollar remained broadly stronger after the Federal Reserve offered fresh guidance on its plans to raise interest rates on Wednesday, underlining concerns over the diverging monetary policy stance between it and the ECB.
The Fed statement reiterated that it expects rates to remain on hold for a "considerable time", after its bond purchasing program ends, but it outlined in more detail how it will start to raise short term interest rates when the time comes.
The Fed cut its monthly asset purchase program by another $10 billion, keeping the program on track to finish next month.
EUR/JPY was up 0.41% to 139.91, off the three month highs of 140.21 reached earlier in the session.
Elsewhere, the broadly stronger dollar was trading near six year peaks against the yen, with USD/JPY up 0.27% to 108.63. The pair rose to highs of 108.86 earlier in the day, the strongest level since September 2008.