LONDON (SHARECAST) - The euro/dollar ended the session near unchanged at 1.264, following an initial feint lower after the ECB´s initial rate decision. That ahead –of course- of today´s reading on non-farm payrolls (NFP) in the UNiedt States, which some believe may hold the key to the result of the next Fed Meeting.
Nevertheless, the steps undertaken by ECB President Mario Draghi have been clearly positive.
The European Central Bank finally confirmed most of the information which had been drip-fed to the markets throughout the last few days today. In exchange for strict conditionality it may –at its discretion- carry out unlimited sovereign bond purchases.
Those will be fully sterilized and, furthermore, collateral rules will be eased, although the possibility of further non-standard liquidity measures was not discussed.
Asian currencies also performed well, and are set for a third weekly advance.
The peso has rallied 0.7% so far this week, while the Taiwan dollar has strengthened by 0.5%.
South Korea’s won was up 0.3% and the Chinese Yuan seems headed for a sixth straight week of gains.
Fitch Ratings yesterday raised South Korea´s credit-worthiness to AA-, citing its “economic and financial stability in a volatile global environment.
Finally, Stateside, the ISM’s service sector purchasing managers’ index rose to 53.7 points in August, versus last month’s reading of 52.6.
The ADP employment report showed the private sector creating 201,000 jobs in August (Consensus: 140,000).