Euro surges as ECB holds fire
By PAN PYLAS (AP)
LONDON (AP) — The euro spiked Thursday to its highest level against the dollar since late 2011 as traders reined in expectations of further easing measures from the European Central Bank.
After the bank kept its monetary policy unchanged, ECB President Mario Draghi made some fairly optimistic remarks about the eurozone economy. He credited the decision to maintain policy, including the main interest rate at the record low of 0.25 percent, to the improving economic backdrop.
"The relatively positive data coming out of Europe in the past month has given Draghi the confidence not to enforce another record interest rate cut," said Dennis de Jong, managing director at UFXMarkets.
As he spoke, the euro was up 0.6 percent on the day at $1.3832, its highest level since November 2011.
Draghi's comments weren't enough to derail the recovery in the region's stock markets, which have benefited in recent days by the easing of tensions in Ukraine.
In Europe, Germany's DAX was flat at 9,543 while the CAC-40 in France rose 0.5 percent to 4,414. Meanwhile, the FTSE 100 index of leading British shares was up 0.2 percent at 6,792 after the Bank of England kept its main interest rate unchanged at 0.5 percent, five years on from its decision to cut to the historic low rate.
Wall Street was poised for a solid opening with both Dow futures and the broader S&P 500 futures up 0.2 percent. The focus in the U.S. is on Friday's release of the February nonfarm payrolls report. The payrolls data often set the market mood for a week or two.
Beyond stocks, the dollar's near-term fortunes could also lie on the payrolls data as traders assess whether the U.S. Federal Reserve will continue to reduce its monetary stimulus at the pace already set.
Earlier in Asia, Japan's Nikkei 225 stock average rose 1.6 percent to 15,134.75 as the dollar headed back toward 103 yen after dropping in previous days on safe-haven buying of the Japanese currency. A lower yen is a boon to the country's exporters.
The dollar was up 0.7 percent at 103.11 yen.
Elsewhere, Hong Kong's Hang Seng was up 0.6 percent at 22,702.97 and South Korea's Kospi added 0.2 percent to 1,975.62.
Shanghai's benchmark climbed 0.3 percent to 2,059.58 as China's Finance Minister Lou Jiwei, speaking on the sidelines of the national legislative session, said the government could tolerate growth less than 7.5 percent this year provided sufficient new jobs are created.
Assets, like oil and gold, which were bid up sharply on Monday, continued to drift lower too. A barrel of benchmark New York crude was down 0.7 percent at $100.702 while an ounce of gold fell 0.3 percent to $1,336.
Elaine Kurtenbach in Tokyo contributed to this report.