The euro weakened on Thursday, undermined by the European Central Bank's saying it would leave interest rates unchanged at record lows and that the fragile economic recovery will keep the loose policy in place for an extended period. The ECB's decision was not unexpected by the market, and it heightened the contrast in monetary policy, with the euro zone moving toward easing and the United States moving toward tightening on an improving economic outlook.
Since May, the euro has dropped 4.6 percent against the dollar, hitting a 9-month low of $1.3333 on Wednesday. In mid-morning New York trade, the euro touched a session low at $1.3336, off 0.30 percent on the day. The greenback rebounded from Wednesday's 1-1/2 week low against the Japanese yen, which sagged on news that Japan's public pension fund plans to increase allocation to the domestic stock market. The dollar rose 0.24 percent to 102.34 yen. The Aussie fell after unexpected jump in Australia's jobless rate, dropping 0.9 percent to $0.9268, having earlier hit $0.9263, its lowest level since early June.
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