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Forex - EUR/USD soars as ECB members unanimously leave rates unchanged

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Shutterstock photo - The euro shot up against the dollar on Thursday after the European Central Bank voted unanimously to leave benchmark interest rates unchanged, catching a few investors off guard.

In U.S. trading on Thursday, EUR/USD was trading up 1.48% at 1.3260, up from a session low of 1.3039, and off from a high of 1.3262.

The pair was likely to find support at 1.3037, Wednesday's low, and resistance at 1.3308, the high from Dec. 19.

While many were expecting the ECB to leave rates unchanged, some had not ruled out a rate cut due to slumping economic indicators across the currency zone.

Others expected rates to hold at 0.75% but were expecting language from ECB President Mario Draghi to hint at possible loosening, which gave the pair room to soar after voting members agreed unanimously to leave policy untouched.

The euro saw added support when Draghi himself said he saw recovery gaining steam this year.

Elsewhere in Europe, Spanish borrowing costs fell at a government bond auction.

Spain's Treasury sold EUR5.8 billion worth of debt, above the targeted amount of EUR5 billion, with the yield on five-year bonds down to 3.99% from 4.20% at an auction last week.

Elsewhere, Italy saw borrowing costs fall to their lowest levels since January 2010 at an auction of 12-month government bonds.

Meanwhile in the U.S., the U.S. Department of Labor said the number of individuals filing for initial jobless claims in the week ending January 5 rose by 4,000 to a seasonally adjusted 371,000, compared to expectations for a decline of 2,000 to 365,000.

Jobless claims for the preceding week were revised down to 367,000 from a previously reported 372,000.

The euro, meanwhile, was up against the pound and up against the yen, with EUR/GBP trading up 0.63% at 0.8206, and EUR/JPY trading up 1.80% at 116.89.

Then yen has come under pressure in wake of Japanese Prime Minister Shinzo Abe's call on the Bank of Japan to double the country's inflation target to 2%.

Meanwhile in the U.K., the Bank of England left the its benchmark interest rate unchanged at 0.5% and made no changes to the size of its GBP375 billion asset purchase program Thursday, in a widely anticipated decision.

On Friday, the U.S. will release a government report on the country's trade balance. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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