Investing.com - The euro strengthened across the board on Thursday following a steep drop in the previous session after the European Central Bank it would no longer accept Greek government bonds as collateral for lending.
EUR/USD was up 0.8% to 1.1434, off overnight lows of 1.1303 and holding below Wednesday’s highs of 1.1484.
The ECB said Wednesday it would no longer accept Greek government bonds from banks seeking funding.
The move shifted the burden on to Greece’s central bank provide additional liquidity for its lenders and increased pressure on the new Greek government to reach a fresh agreement with its lenders on the terms of its current €240 billion bailout.
The single currency was boosted after data earlier in the day showing that German factory orders rose 3.4% on a year-over-year basis in December, the strongest increase in six months.
The euro was given an additional boost from strong gains against the Swiss franc.
EUR/CHF was last up 0.73% to 1.0582, the highest level since the Swiss National Bank scrapped its exchange rate cap against the euro on January 15.
The broad move higher has fuelled speculation that the Swiss central bank is intervening in the market to weaken the franc.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.76% to 93.86, pressured lower by strength in the euro.
In the U.S., data on Thursday showed that the number of Americans filing first-time claims for unemployment benefits rose by a smaller-then-forecast 11,000 to 278,000 last week, indicating that the recovery in the labor market is continuing.
A separate report showed that the U.S. trade deficit in December widened by 17.1% to $46.6 billion as imports rose. It was the largest increase since July 2009.
Markets were turning their attention to the U.S. nonfarm payrolls report for January, which was due to be published on Friday.
In other trade, the dollar was slightly higher against the yen, with USD/JPY rising 0.17% to 117.47, while EUR/JPY advanced 1.01% to 134.34.