During early Asian deals on Thursday, the European currency showed strength against its major counterparts on optimism the ECB President Jean-Claude Trichet may signal that the bank will refrain from cutting interest rates further after lowering them later today. The euro climbed to a 2-day high against the US dollar and the Swiss franc and recovered from a new multi-week low against the British pound.
Today, the governing council of the European Central Bank is expected to cut its overnight rate by 50 bps to 1 percent, a new historical low. The decision to cut rates is widely expected and all eyes will be on the ECB press conference hosted by Jean-Claude Trichet in Frankfurt.
The European currency traded higher against the US dollar during early Asian deals on Thursday. At 10:30 pm ET, the euro-dollar pair reached a 2-day high of 1.3294, compared to 1.3250 hit late New York Wednesday. The next upside target level for the single currency is seen around 1.353. The pair is currently quoted at 1.3282.
The European currency that closed Wednesday's North American session at 0.9159 against the British pound edged down to 0.9147 during Thursday's early Asian deals. This set the lowest point for the pair since March 10, 2009. Thereafter, the euro-pound pair reversed its direction and climbed to 0.9176 at 10:45 pm ET. If the pair gains further, 0.938 is seen as the next target level.
Against the Swiss franc, the 16-nation currency edged higher during Thursday's early Asian trading. At 10:30 pm ET, the euro-franc pair hit a 2-day high of 1.5187, compared to Wednesday's closing value of 1.5178. On the upside, 1.534 is seen as the next target level for the pair.
The euro that closed Wednesday's New York deals at 130.56 against the Japanese yen advanced to 131.24 at 10:10 pm ET. The pair is currently quoted at 131.04 with 134.8 seen as the next target level.
In economic news from Japan, the monetary base grew 6.9 percent on year in March, the Bank of Japan said today, standing at 94.46 trillion yen. That's up from 93.65 trillion yen in February, which saw a 6.4 percent annual increase. On a seasonally adjusted basis, the monetary base was up 5.6 percent on month at 94.3 trillion yen.
Before the ECB rate announcement, traders are likely to focus on the French producer price index for February, British nationwide house price and construction PMI reports in the upcoming European session.
Market participants also keenly await the outcome of the G-20 meeting and the market will be closely watching to see what measures they will discuss to fight the global economic crisis.
Across the Atlantic, the Labor Department is due to release its customary jobless claims report for the week ended March 27th at 8:30 am ET.
The Commerce Department is due to release its report on factory goods orders for February at 10 am ET. Orders for manufactured goods are likely to have decreased 0.3% in the month.
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