The greenback erased intra-day losses made in Asia and European morning and caught a bid in New York ending Thursday higher against majority of its peers, except versus Japanese yen on safe-haven usd buying due to fall in U.S. equities. (Dow ended at 33,816, down 321 points or -0.94%)
On the data front, Reuters confirmed fewer Americans filed new claims for unemployment benefits last week, suggesting layoffs were subsiding and strengthening expectations for another month of blockbuster job growth in April as a re-opening economy unleashes pent-up demand. Initial claims for state unemployment benefits totaled a seasonally adjusted 547,000 for the week ended April 17 compared to 586,000 in the prior week. Economists polled by Reuters had forecast 617,000 applications in the latest week.
Versus the Japanese yen, dollar continued its recent losing streak and fell from 108.14 in Asia to a fresh 6-week low of 107.82 in European morning. However, the pair then rose to session highs of 108.23 in New York on usd's broad-based recovery but only to weaken again to 107.97 near the close due to weakness in U.S. Treasury yields and stocks.
Although the single currency traded sideways in Asia, price rose from 1.2023 in Europe to session highs of 1.2069 in New York morning after the European Central Bank kept its interest rates unchanged. However, the pair erased intra-day gains and tumbled to 1.1994 on renewed usd's strength before recovering to 1.2017.
Reuters reported at today's meeting, the Governing Council decided to reconfirm its very accommodative monetary policy stance: The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively. The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.
The Governing Council will continue to conduct net asset purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of 1,850 billion until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over.
Reuters also said that the European Central Bank did not on Thursday discuss any phasing out of the huge programme of bond purchases it is conducting to help offset the economic impact of the coronavirus pandemic, ECB President Christine Lagarde said.
Although the British pound re-tested Wednesday's 1.3949 high in Asia, renewed selling interest emerged and intra-day fall accelerated in European morning. The pair later tumbled to session lows of 1.3825 in New York on cross-selling in sterling as well as renewed usd's strength.
Data to be released on Friday :
Australia manufacturing PMI, services PMI, Japan nationwide CPI, Jibun Bank manufacturing PMI, U.K. Gfk consumer confidence, PSNB GBP, PSNCR GBP, retail sales, markit manufacturing PMI, markit services PMI, France markit manufacturing PMI, markit services PMI, consumer confidence, Germany markit manufacturing PMI, markit services PMI, EU markit manufacturing PMI, markit services PMI, U.S. building permits, markit manufacturing PMI, markit services PMI, new homes sales.
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