By Joseph Adinolfi, MarketWatch , Hiroyuki Kachi
NEW YORK (MarketWatch) — The euro recovered from hefty losses incurred Wednesday, which followed the Federal Reserve’s afternoon monetary policy statement.
The shared currency shrugged off consumer-price deflation in Germany and a strong jobless claims reading in the U.S. — data that would, under normal circumstances, weigh on the currency — to trade higher against the dollar, pound and yen.
Jameel Ahmad, a senior analyst at FXTM, said that the euro’s bounce was expected after heavy selling Wednesday.
The market is also waiting for a reading on eurozone consumer prices, which are due Friday, before it can determine how serious the eurozone deflation threat really is, Ahmad said.
The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.2665% traded at $1.1320, compared with $1.1286 late Wednesday. The shared currency also traded higher against the pound /zigman2/quotes/210561182/realtime/sampled EURGBP -0.6028% and the /zigman2/quotes/210561215/realtime/sampled EURJPY +0.2199% yen.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY -0.0616% traded at ¥118.34, compared with ¥ 117.46 late Wednesday in New York, after the market decided that a remark by Japan’s Chief Cabinet Secretary Yoshihide Suga left the door open for more easing.
“It would be inconceivable for the government to say such a thing without consulting the BOJ, which decides the course [of monetary policy],” Suga said while speaking to reporters at the prime minister’s residence late Wednesday.
The dollar also benefited from month-end buying from Japanese importers who needed to pay for foreign goods.
Elsewhere, the Australian dollar crumbled against the U.S. dollar, falling to its lowest level since May 2009, on reports that the Reserve Bank of Australia will cut its cash rate at next Tuesday’s policy meeting.
The aussie /zigman2/quotes/210560947/realtime/sampled AUDUSD +0.4126% traded at 77.66 cents, compared with 78.96 cents Wednesday.
The ICE U.S. Dollar Index, /zigman2/quotes/210673925/realtime XX:BUXX -0.30% , a measure of the dollar’s strength against a basket of six trade-weighted rival currencies, was up 0.3% to 94.74.
The euro inched lower against the Danish krone after the Danish National Bank cut its deposit rate to negative 0.5%, its third cut in two weeks. The cut was made to prevent the krone from strengthening against the euro.
The euro /zigman2/quotes/210561174/realtime/sampled EURDKK +0.0107% traded at 7.44 krone, compared with 7.45 krone Wednesday.
The Russian ruble tumbled against the dollar, falling deeper into its mid-December lows, after Nymex-traded crude-oil futures for March delivery hit a six-year low at $43.58. U.S.-traded crude settled off its lows at $4.45, but the ruble remained weak.
One dollar /zigman2/quotes/210561610/realtime/sampled RUBUSD -0.7690% was worth 68.83 rubles, compared to 67.41 rubles Wednesday.