The euro was advancing 0.85% against the dollar on Thursday after the ECB decided to stand pat on its record-low benchmark interest rate. The Bank of England also held interest rates unchanged. Both moves were expected by economists.
ECB President Mario Draghi said at a press conference that he expects euro-area growth to stay weak but that downside risks could be held in check by effective actions.
"Draghi's rhetoric was firmly supportive of the Euro and the efforts set forth by governments, with him clearly stating that the OMTs (the bond-buying program created to cap sovereign yields) were ready for use, so long as a government asks for assistance," said Christopher Vecchio, currency analyst at DailyFX. "Considering that the Troika would have to be involved, I believe that the efforts set forth by the Spanish government via the 2013 budget will be deemed sufficient in the coming days, paving the way for a full sovereign bailout by Spain."
The European markets also got a boost from easing Spanish borrowing costs after a smooth government bond auction.The FTSE 100 in London finished up 0.03% and the DAX in Germany settled off 0.23%. The Nikkei Average in Japan closed up 0.89% and the Hang Seng in Hong Kong edged up 0.09%. The Bank of Japan's two-day policy meeting is underway and set to conclude on Friday. Investors got some favorable data to chew over ahead of Friday's September jobs report as the Labor Department reported initial jobless claims for the week ended Sept. 29 of 367,000, slightly better the consensus estimate of 370,000. The four-week moving average was unchanged at 375,000. Also, outplacement consulting firm Challenger, Gray & Christmas said layoffs picked up modestly in September but stayed low, with U.S.-based employers announcing plans to cut 33,816 jobs from their payrolls in September, up 4.9% from a 20-month low of 32,239 job cuts in August. The Census Bureau said that factory orders fell 5.2% in August, which was slightly better than the 6% decline expected by economists, after rising by a downwardly-revised 2.6%.