The US awaits in anticipation for Non-farm payrolls as the Euro gains strength off the back of the ECB summit
04/May/2012 • Currency Updates•
Sterling hovered near a 22-month high against the euro yesterday and could push higher if a service sector survey adds weight to impressions that the economy is turning out better than an ailing Eurozone.
Bond-market measures of U.K. inflation expectations declined as a report showed house prices fell and growth in British services slowed more than expected. Sterling erased a decline against the euro after the European Central Bank left its benchmark interest rate unchanged at 1 percent.
U.K. house prices fell last month as a tax break for first- time buyers ended and the economy entered a double-dip recession
With Spanish stocks at 9 year lows, the day started off in Europe on a sour note with Germany, posting worse-than-expected unemployment numbers which immediately had effect on the the common currency.
The euro rose against the yen and rallied from two-week lows versus the U.S. dollar on Thursday after ECB chief Mario Draghi gave a more positive assessment of the euro zone economy than expected. Interest rates remained the same with draghi also stating a third LTRO (Long-Term Refinancing Operation ) would not be required as the second LTRO would need more time to impact the economy.
The euro came under pressure earlier in the European session when Spain sold 2.5 billion euros of three-and five-year bonds to solid demand, but yields profited compared with previous auctions.
The dollar held steady versus the yen and euro on Thursday, but could face negative risks if U.S. jobs data disappoints and stirs renewed speculation about further monetary easing from the U.S. Federal Reserve.
The euro was little changed having bounced off the previous day’s two-week low after European Central Bank chief Mario Draghi gave no strong hints on Thursday about the possibility of more monetary stimulus.
The U.S. payrolls report is expected to show a gain in April, however if a disappointing result is seen the USD is likely to be put under pressure. In other new the Malaysian markets has opened her legs.