The euro is recovering moderately early in the US session after the ECB said the downside risks to the economic outlook were less pronounced. However, it remains one of the worst of the week, along with the dollar, yen, and Swiss franc.
The dollar is still under pressure after worse-than-expected jobless claims data. The Canadian dollar is now leading among other commodity currencies, and the pound sterling is growing after the head of the Bank of Canada Tiff Maclem said that there is no need for additional stimulus based on the baseline scenario.
The ECB, as expected, left its “highly adaptive monetary policy stance” unchanged. The main refinancing rate was kept at the level of 0.00%, the marginal interest rate a, and the rate on deposits – 0.25% and -0.50%, respectively.
Rates will “remain at or below current levels until the inflation forecast steadily approaches a level close enough to but below 2% within its forecast horizon, and this convergence will continue to be reflected in core inflation dynamics.”
The US dollar fell today after the inauguration of Joe Biden. The dollar index fell 0.32%, continuing the trend that started on Tuesday.
As Janet Yellen suggested, traders usually expect new incentives from the current administration. US data showed that building permits rose to 1.704 million in December from 1.635 million in the previous month. During the same period, the number of commissions increased from 1.547 million to 1.6 million. And last week, over 900,000 Americans signed up for initial jobless claims.
The number of initial applications for unemployment benefits in the United States fell by 26 thousand to 900 thousand for the week ended January 16, which is higher than expectations of 860 thousand people.
Also published data on the production conditions of the Federal Reserve Bank of Philadelphia in January to 26.5 from 9.1, which is above expectations of 12.2. Housing construction commissioning in December rose to 1.67 million against forecasts of 1.56 million. Building permits rose to 1.71 million from the expected 1.60 million.
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