The pair is likely to trade with a firm undertone today in Asia, buoyed by the euro’s strength against the dollar amid receding concerns about the debt crisis in Europe and the region’s economy. ECB President Mario Draghi said last week that the ‘darkest clouds’ over the region’s economy have lifted due to decisive policy steps last year, prompting European banks to repay more than expected funds borrowed from the ECB. The euro reached $1.3587, the best level since November 2011, on Wednesday. Meantime, the Fed decided to maintain $85 billion purchases of assets a month following the FOMC meeting, as widely expected by the market. The decision also came after data showed that the U.S. economy unexpectedly contracted in the fourth quarter of 2012 due to “transitory factors,” including bad weather. Investors now await the incoming U.S. data for implications for the U.S. economy and the monetary policy. Non-farm payrolls, due Friday, are forecast to have increased 160,000 in January, up from +155,000 in December, while the ISM manufacturing index, due also Friday, is expected to have climbed to 51.0 in January from 50.2 in December. The dollar moved from Y90.66 to Y91.41, the highest level since June 2010, on Wednesday.
EasyForexNews Research Team