Euro Gained On Trichet's Hawkish Comments

The euro gained across the board after the European Central Bank left interest rates unchanged at 4.0% as expected. ECB Chairman Trichet said in the post-meeting press conference that the biggest risk for price pressures is that they will increase. His hawkish comments reduced expectations of a rate easing in the coming couple of months. The euro broke 1.46 and tested 1.4650 versus the dollar.

Meanwhile, the Bank of England (BOE) made its first rate cut decision in 2 two years. The bank lowered its benchmark rates by a quarter-percentage point to 5.50%. The sterling dipped to as low as 2.0184 after the rate decision.

The dollar was little changed after a report showed US weekly jobless claims fell from 352k to 338k. Market will focus on the employment report to be released by the Labor Department tomorrow. Non-farm payrolls are expected to fall from 166k to 75k in November. Should the job report surprised the market by showing an above 100k figure as Wednesday's ADP job report did, the greenback is very likely to rebound sharply across the board.

The Canadian dollar gained as oil price rebounded to above 90 dollar per barrel and a run of strong economic data.