Major Currency Pairs Analysis: June 7, 2013

The euro hit three-month highs against the dollar on Thursday after the European Central Bank left interest rates unchanged at 0.5%. The pair saw added support when ECB President Mario Draghi hiked the bank's eurozone growth forecast for 2014, while lackluster weekly U.S. jobless claims weakened the greenback. The ECB left its benchmark interest rate unchanged at 0.5% and left deposit rates at zero. ECB President Mario Draghi said the eurozone economy should contract by 0.6% in 2013, compared with a 0.5% contraction forecast made in March. However, the European monetary authority hiked its 2014 growth forecast to 1.1% from 1.0%, giving the euro support. Meanwhile in the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week fell by 11,000 to 346,000, compared to expectations for a decline of 12,000 to 345,000. Jobless claims for the preceding week were revised up to 357,000 from a previously reported increase of 354,000.
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GBP/USD
The pound held extended against the U.S. dollar on Thursday, trading near one-month highs after positive U.S. jobless data, while the Bank of England announced no changes to monetary policy following its policy-setting meeting The U.S. Department of Labor said the number of people who fled for unemployment assistance last week fell by 11,000 to 346,000, compared to expectations for a decline of 12,000 to 345,000. Jobless claims for the preceding week were revised up to 357,000 from a previously reported increase of 354,000. The data came one day after weak U.S. private sector jobs data lowered expectations that the Federal Reserve would begin to unwind its asset purchase program this year. U.S. non-farm private employment rose by a seasonally adjusted 135,000 last month, below expectations for an increase of 165,000. The BoE left interest rates on hold at a record low 0.5% and kept the size of its asset purchase program unchanged at GBP375 billion at outgoing Governor Mervyn King’s final meeting.
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USD/JPY
The dollar tanked against the yen on Thursday, due to uncertainty ahead of the Friday's release of the May jobs report. Weeks of conflicting data have investors unsure whether or not the Federal Reserve may wind down stimulus measures soon. In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week fell by 11,000 to 346,000 compared to expectations for a decline of 12,000 to 345,000. Jobless claims for the preceding week were revised up to 357,000 from a previously reported increase of 354,000. The data clouded market expectations as to when the Federal Reserve will begin to scale back stimulus measures. Weeks of stronger-than-expected economic indicators have sent the dollar gaining at times on hopes the Fed will let the U.S. economy stand on its own two feet, while disappointing figures have had the opposite effect. Investors avoided the greenback ahead of Friday's release of official unemployment figures, and snapped up safe-haven positions in the yen, viewed widely as oversold.
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USD/CAD
The U.S. dollar was almost unchanged against the Canadian dollar on Thursday after data showed that U.S. jobless claims fell less than expected last week. The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell by 11,000 to 346,000, compared to expectations for a decline of 12,000 to 345,000. Jobless claims for the preceding week were revised up to 357,000 from a previously reported increase of 354,000. The data came one day after U.S. private sector jobs data lowered expectations for a strong economic recovery. U.S. non-farm private employment rose by a seasonally adjusted 135,000 last month, below expectations for an increase of 165,000.
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