The pair soared on Wednesday trading, for the third straight session, as the improvement in the sentiment after the IMF plan to expand its lending capacity by $500 billion and successful European debt auctions damped demand on the dollar.
The IMF is planning to expand its lending capacity to $885 billion from the current $385 billion to protect the global economy from the negative consequences of the European debt crisis, according to an official at a Group of 20 nation.
A successful bond selling by bothGermanyandPortugaladded more positivity to the sentiment.
Germany sold two-year bills at lower yields and stronger demand, where the government sold 3.44 billion euros of 2-year notes with an average yield of 0.17% from 0.29% in the prior auction, while the bid-to-cover ratio improved to 2.2 times compared with the previous 1.43 times recorded December’s auction.
Portugalalso auctioned 1.25 billion euros, 754 million euros and 496 million euros of 11-, 6- and 3-month bonds respectively, where the yield of the six-month bills retreated to 4.74% from 5.25% in the prior auction.
Furthermore,Greecewill resume talks with private sector debt holders on Wednesday after the halt of the negotiations on January 13, to reach an agreement over the size of losses to be bared by creditors to avert a possible default as early as in March.
On the other hand, data from the U.K. gave slight support to the pair as while jobless claims for the month of December recorded a drop to 1.2 thousands compared with 3.0 thousands in November, which was revised down to 0.2 thousands, ILO unemployment for the three months ended November climbed to 16-year high to 8.4%, exceeding both prior and median forecasts of 8.3%.
On Thursday, theU.S.economy will release initial jobless claims for the week ended Dec. 24 and continuing claims for the week ended Dec. 16, where they will be available at 13:30 GMT. At 14:45 GMT,Chicagopurchasing manager is estimated to retreat to 60.2 in Dec. from the previous 62.6. 15 minutes later, pending home sales for Nov. will signal 1.8% advance compared with the preceding 10.4% rise.
TheU.S.will start the data at 13:30 GMT with the Inflation Report. The CPI index is expected with 0.1% rise on the month after holding unchanged the previous month and on the year to slow to 3.1% after 3.4%. Excluding food and energy the index is expected with 0.1% rise on the month after 0.2% gain and on the year to hold at 2.2%.
December Housing Starts index is also due the same time and expected flat at 685,000 while Building Permits are expected with 0.7% drop to 675,000 from 681,000.
As for the Jobless Claims for the week ending in January 14 it is also due at 13:30 GMT as usual after last week they rose 24,000 to 399,000 last week.
As for the Philadelphia Fed Index for January the index is due 15:00 GMT and expected to improve slightly to 11.0 from 10.3.
The data will affect the pair’s movement due to its relevance, yet the pair will probably be more affected by the general sentiment which will focus on an auction fromSpain.
Originally posted here
