Euro Improves On ECB's Positive Outlook
The euro surged to nearly $1.39 on Thursday after the European Central Bank decided against further easing at its March policy meeting. The common currency traded at $1.3868 at 7:30 GMT on Friday morning as the dollar remained steady ahead of the US' non-farm payrolls data.
As most expected, the ECB elected to keep its key interest rate unchanged at 0.25 percent; but the bank surprised by refraining from taking any other actions to inject liquidity into the market. Despite inflation figures well below the bank's two percent target, ECB president Mario Draghi was upbeat about the bloc's economic outlook at the press conference following the meeting.
The Wall Street Journal reported that Draghi said the region's improving business activity combined with a pick up in the service sector influenced his decision not to ease further. He noted that consumer confidence was on the rise in fragile countries like Spain and Italy and that the region's unemployment had stabilized.
Many see the bank's positivity pushing the euro even higher this month, as the tone of the press conference suggested the bank isn't likely to move in April unless there is a significant shock in the meantime.
Meanwhile, investors in the US are waiting for the highly anticipated non-farm payrolls data, due out later on Friday. Economists expect to see an increase of 152,000 jobs, up from January's 113,000 increase. If the report lives up to expectations, US markets will likely see a lift. However, if the report falls short, most aren't expecting to see much of a dip as investors will probably attribute the poor data to the nation's severe winter weather.
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