At 8:30 AM ET/1330 GMT the market will have to deal with Draghi speaking for an hour or so, and data in the form of Canada retail sales, USA employment claims and goods trade balance. Some optimistic comments from Brexit minister David Davis that he expects a transitional Brexit deal before the end of March may have played a role as well.
The decline in EUR/USD is actually aiding the Pound higher against the Dollar.
USDJPY (109.02): The USDJPY closed at 109.20 yesterday, marking a fresh 4-month low. Even if the Treasury secretary did not intend to weaken the dollar, his comments were irresponsible. Steven Mnuchin, the US Treasury Secretary has changed the US Dollar policy and now sees a weaker Dollar as the way to move the US economy forward.
Euro/dollar surged on the back of the dollar's weakness, breaking above the 1.2400 zone.
Following are highlights of ECB President Mario Draghi's comments at a press conference after the bank's policy meeting. However, even in that case, any dip in euro/dollar could remain relatively short-lived, considering the increasing pessimism around the dollar.
"The concern was broader than simply the exchange rate, it was about the overall status of worldwide relations right now".
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"Overall, we anticipate the APP will be tapered after September, with net purchases finishing by the year-end, paving the way for interest rates to be raised in the middle of 2019", stated Lloyds Bank.
European Central Bank president Mario Draghi in Frankfurt on Thursday.
At 1245 GMT, ECB policymakers are widely expected to keep interest rates unchanged at 0.0%. Investors are expecting him to be extra dovish now because if he doesn't adopt an overly dovish tone, it would provide more tail wind for the euro. In addition, views on the strengthening euro are also anticipated to attract attention. The bank is set to hold its key rate at 0.50 percent.
All-in-all, the euro managed to hit a total of 0.7% increase to $1.2498 against the dollar. However, that was not sufficient to stop the depreciation of the US dollar in the near term as the euro appreciated above 1.25 during the press conference.
French 10-year bond yields also attained a 6-month high around 0.9270 percent, while 10-year borrowing costs across the euro area were 2-5 basis points higher on the day. There was a glimmer of good news for central bankers in an ECB survey of private-sector analysts also published Friday, which found forecasters had slightly upgraded their inflation expectations for the coming years.
Earnings are expected from companies such as Dow components 3M Co, Caterpillar Inc and Intel Corp on Thursday.A strong quarterly earnings season and solid economic data have helped propel major Wall Street indexes to a strong start to the year, with each on track for its fourth straight week of gains.
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