The Euro continued to firm against the U.S. Dollar in Asian trading on Thursday, boosted by growing hopes of a more accommodative bias from some members of the European Central Bank and the U.S. Federal Reserve suggesting that the central banks might provide additional stimulus in the months to come. The ECB yesterday decided to maintain its current monetary policy but Mario Draghi acknowledged that the decision to hold rates was not unanimous; meanwhile in the U.S. Federal Reserve Vice-Chairman Janet Yellen laid out an argument for additional stimulus.
Currency-linked assets like the Euro were also provide with a lift as the Australian Dollar surged to a 3-week peak against the U.S. Dollar as employment data released earlier handily beat analysts’ expectations. As reported at 12:41 p.m. (JST), the EUR/USD pair was trading earlier at $1.2569, retreating from $1.25859, and well off $1.2288, the 2-year low that was struck last week. Analysts say that $1.2600 marks a level of immediate resistance, followed by $1.27671.
The AUD/USD pair moved to a 3-week peak and edged closer to parity, trading at $0.9967 before settling back at $0.9945, a gain of 0.3%. Earlier this week, the Reserve Bank of Australia cut its cash rate by 25 basis points to 3.5% in light of a gloomier local and global outlook, but positive economic data released in the days since would appear to negate the central bank’s outlook.