The US dollar was unable to accelerate gains, getting under pressure against major currencies on Thursday. The US dollar index, initially reaching a seven-month high at 83.13, dropped this morning below 82.50. The Australian dollar, Canadian dollar, euro, Swiss franc and British pound continued the rally started yesterday. Especially oversold currencies were the British pound and the Canadian dollar, and it looks like the long awaited correction got started.
The euro was also able to win back some ground against the greenback on Thursday, but before that the pair fell to a new 3-month low at 1.2910. It was trading above 1.30 today, at the beginning of the European trading session. Support to the European currency was granted by the results of yesterday auction of Spanish long-term bonds. Market participants have demonstrated a strong demand for Spanish debt securities, reducing the required rate of return compared to earlier auctions. The risk for the euro today is the first Italian Parliament meeting held after the general elections at the end of last month, resulted in a sharp increase in political uncertainty.
The British pound shows steady growth against the US dollar. The pair fell to the lowest level since June 2010 - 1.4830 earlier this week. However, the pound is trading above 1.51 today. Yesterday the head of the BOE - Mervyn King said that the central bank does not pursue further depreciation of the national currency, and added that it is fairly valued now.
Meanwhile, the Japanese yen stood at 96 yen per dollar after Japanese parliament approved Haruhiko Kuroda as head of the BOJ, and also two deputies nominated by the Prime Minister Shinzo Abe. New bank governors are active supporters of monetary stimulus. Now all the attention will be focused on the first central bank meeting outcome scheduled for April 3-4, although there are messages running around that the meeting may be held ahead of the schedule.
