The dollar index hit a fresh four-year high of 85.17

Good Morning,

- The dollar index hit a fresh four-year high of 85.17, as Euro test new 14-months lows at 1.2730 level…

- Asian stocks slipped on Thursday, giving back earlier gains as last night’s rebound on Wall Street had a temporary effect.

- ECB Draghi: He expects “modest growth” in euro zone in second half. ECB remains fully determined to counter risks to medium-term inflation outlook. ECB ready to use additional unconventional instruments within mandate, alter size or composition of unconventional interventions if necessary. “Unacceptably high unemployment” and weak credit growth likely to curb euro zone recovery. Heightened geopolitical tensions could dampen business and consumer confidence. Sanctions on and by Russia have had limited spillover effects on euro zone economy so far. Risk of insufficient structural reforms could weigh on business environment.

- Barclays on EUR/USD: The Bank maintains its structural bearish view on the EUR targeting 1.10 in 12 months. "FX markets finally have begun to catch up to consensus expectations of diverging growth and monetary policy within the G4. Nominal interest rates in UST and bunds have been diverging since early 2013, but the USD has only started to outperform since July, in line with our views. In our view, the reason for the FX market’s late response to the consensus view of the world growth outlook should not come as a surprise," Barclays argues. "EURUSD seems to be most responsive to the 1y real interest rate differential than to any other part of sovereign rates curves. Our simple interpretation of this is that EURUSD is most sensitive to a fairly imminent monetary policy changes. Against an already weak backdrop, activity has been further dampened by tensions with Russia. We expect stimulus to come exclusively from monetary policy and the EUR to bear the burden.” Barclays projects.

- BOE’s dep gov Shafik says they may have to move quick on interest rates if wage increases not accompanied by productivity increases. Wage growth with productivity gains can delay rate rises. Productivity gains will guide rate increases. UK recovery is “encouraging”. Europe poses significant risks to UK economy. BOE asset sales are still “a way away”.

- RBA Stevens: One area of concern is investor housing finance growth. Open to using macro prudential tools – and that’s the kind of thing we have in mind right now. Says skeptical about macro prudential tools as a panacea. The RBA referred to investor housing finance growth yesterday in the Financial Stability Review. Stevens referring to it again, and also acknowledging he might use macro prudential tools.

- The dollar traded as high as 109.34 yen, with eyes now at 109.46 level, as a break above would take the greenback to levels not seen since 2008.

- The New Zealand dollar hit a one-year low after the central bank governor decried the currency's recent strength.

- The Reserve Bank of New Zealand considers the level of the exchange rate is unjustified and unsustainable, and that it is susceptible to a significant downward adjustment, Governor Graeme Wheeler said in a statement today. Wheeler said the Bank would welcome a move towards a more sustainable exchange rate level.

- Watch today: EU money supply, US durable goods, US jobs.

Have a nice Day !