Little News from US Jobs and Trichet, Dollar Softens

The two key events of the day are passing with little fanfare. The weekly initial jobless claims in the US slipped and sufficiently so as to bring down the 4-week moving average for the first time in a little over a month, but remain too close to 500k to ease anxiety very much.

The ECB left rate on hold, revised up both growth forecasts a notch and inflation. The lending facilities have been extended and the ECB will conduct special operations later this month to help ensure a smooth expiry for the large long-term refi operation.

There is little surprising here and after initially easing on the news, the euro has firmed back to new session highs–amid talk of leveraged account purchases. Equity markets firmed and general risk-on trades coming back to the fore, except it does not appear to be helping the dollar against the yen or Swiss franc. Sterling remains a laggard after a string of soft data. The Australian dollar is also not participating in the move against the greenback, but is seeing earlier losses pared.