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European Session – Sterling lifted after BoE, euro under pressure after Draghi
January 9, 2014 3:14 pmVideo
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Thursday’s European Session was livened up with two key events – the Bank of England and European Central Bank policy announcements.
Sterling jumped against the dollar after the BoE announced it held its benchmark interest at a record low 0.50% and its bond-buying target at 375 billion as expected. The central bank’s monetary policy committee (MPC) did not issue a statement after its announcement, which further benefitted the pound.
The pound rose early in the session to 1.6478 on improved UK trade balance data before retreating to 1.6445 and then rising back up to 1.6470 after the policy announcement. Cable has been steadily rising this week after a rough start to the New Year that brought it down to 1.6336.
The euro received support from early in the European session, after a Euro zone report showed economic confidence improved in December to the highest since July 2011, climbing to 100 in December from a revised 98.4 the previous month, according to a European Commission report.
After the ECB policy announcement, the euro rose to as high as 1.3632. As expected, the main lending rate was kept at a record low 0.25% and the deposit rate was left at 0.0%. However as Draghi’s speech put the euro back under pressure, bringing it down to 1.3547.
The dollar strengthened for a third day against the yen reaching 105.04. Helping support the dollar was the US initial jobless claims which fell more-than-expected.
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