The greenback declined against high-yielding currencies on Thursday as signs of global economic recovery supported the demand on risky assets. U.S. jobless claims came out at 521,000 which is better than forecast figure of 545,000, Dow Jones Index rose 61 points to end at 9786 level. Aussie and kiwi made another fresh 2009 high of 0.9092 and 0.7457 respectively as the employment data in Australia continued to show upbeat on the economy (unemployment rate dropped to 5.7% from 5.8%, better than forecast of 6.0% while employment change unexpectedly showed an increase of 40,600, compared to a drop of 10,000 in forecast).

The single currency edged higher to 1.4774 in early Asian trading due to renewed dollar's broad-based selling and rose to 1.4802 after stimulated by the U.S. data (while ECB left rates unchanged at 1.00%). Price then retreated from there on profit-taking to 1.4720 but rose again on Trichet's comments that the recovery in the eurozone will be at a gradual pace and interest rates are appropriate. On the subject of currencies, Trichet said that U.S. support for a strong dollar is extremely important. Euro advanced to as high as 1.4818 before retreating in U.S. afternoon.

Cable rose in Asian line with dollar's broad-based weakness and despite subsequent retreat to 1.5973, cross buying against euro and rising equities gave support to the pair, sending it higher and reached an intra-day high of 1.6121 as investors are encouraged by the central banks' discussion of the possibility of implementing of exit strategies in the near future (Reserve Bank of Australia was one of the first to hike interest rates while BOE kept interested rate at 0.50%).

Economic data to be released on Friday:

Japan machine orders, German trade balance, CPI, U.K. trade balance, PPI Canada unemployment rate, U.S. and Canada trade balance.