The European Central Bank began buying corporate bonds on Wednesday and the euro climbed above the 1.14-mark. However, the slight appreciation of the euro can rather be attributed to the shift in expectations for Federal Reserve tightening. The U.S. dollar weakened as Investors see only a 58 percent chance that the Fed will raise rates by year-end. The greenback’s recent weakness contributed markedly to the increase in the euro but in general the dollar remains a buy on pullbacks as the Fed remains on track to raise interest rates in 2016.
The movements were, however, limited in the currency market. The euro rose merley 10 pips above the 1.14-barrier whereas it marked a current support at around 1.1350. ECB President Mario Draghi is scheduled to speak in Brussels at 7:00 UTC, which could impact on the euro.
From the U.S. we have Continuing and Initial Jobless Claims due for release at 12:30 UTC, but these reports are not expected to have a significant impact on the USD.
The British pound rebounded from a high at 1.46 as Brexit risks continue to put pressure on the currency. If sterling breaks again significantly below 1.4495, we see a greater chance of a renewed bearish move towards 1.4440 and 1.4385. However, above 1.4540 gains could be limited until 1.4580.
The only second-tier economic data from U.K. will be Trade Balance figures due for release at 8:30 UTC.
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