US recap: ECB caution gives EUR/USD a lift
Sept 12 (Reuters) -The euro rose after the European Central bank lowered its policy rate 25 basis points, as expected, while suggesting future cuts are data dependent.
The central bank’s inflation forecasts were largely left unchanged just shy of 2%, the growth outlook was marked down and core inflation was lifted slightly.
ECB President Lagarde noted that inflation was being sustained by rising wages. The common currency was supported by higher bund yields and rising European share prices following the rate cut.
The dollar fell after a mixed PPI report and uptick in weekly jobless claims. Losses were partly mitigated by higher Treasury yields as U.S. shares advanced.
The US budget deficit for August was $380 billion versus $317 billion projected.
Treasury yields were higher across tenors, advancing 2-5 basis points amid curve steepening. The 2s-10s curve moved to 3.1bp.
The S&P 500 rose 0.80% after reversing an earlier loss.
WTI jumped 2.76% amid supply concerns linked to Hurricane Francine disruption.
Copper advanced 1.23% to a near two-week high on signs of China demand.
Gold rose 1.69%, setting a new record during session.
Heading toward the close: EUR/USD +0.41%, USD/JPY -0.06%, GBP/USD +0.44%, AUD/USD +0.63%, DXY +0.3%, EUR/JPY +0.22%, GBP/JPY +0.91%, AUD/JPY +0.38%.
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Editing by Burton Frierson
Robert Fullem is a Reuters market analyst. The views expressed are his own.
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