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Euro climbs to 5-week peak vs dollar as ECB keeps rates steady

Thursday, 5 Dec 2013 | 3:19 PM ET
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The euro rose to a five-week high against the dollar on Thursday after the European Central Bank left a key interest rate unchanged and its president Mario Draghi downplayed deflation risks.

The ECB decision overshadowed stronger-than-expected data on U.S. third-quarter growth and weekly jobless claims, which briefly lifted the dollar across the board.

The ECB held its key interest rate at 0.25 percent at its last policy meeting of the year, choosing not to follow through on November's surprise cut. Draghi did say the euro zone could experience a "prolonged period of low inflation," but did not highlight its downside.

(Read more: ECB: Inflation will be below target for 2 years)

The euro rose 0.5 percent to $1.3663, having climbed as high as $1.3674, according to Reuters data, the strongest since the end of October.

The euro zone currency also gained versus the British pound, rising 0.9 percent to 83.66 pence.

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In the United States, the economy grew faster than initially estimated in the third quarter as businesses aggressively accumulated stock, while initial claims for state unemployment benefits dropped 23,000 to a seasonally-adjusted 298,000 last week, data showed on Thursday.

The dollar briefly pared losses against the yen and hit a session high against the euro after the data.

It was last down 0.6 percent at 101.70 yen as losses in stocks boosted the safe-haven Japanese currency. Investors often flock to the yen in times of market stress.

The dollar index, which measures the greenback versus a basket of six currencies, fell 0.4 percent to 80.293.

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