FOREX. Thursday results [E]

On Thursday main currencies traded for midday in painful expectations. Market was focused mainly on BOE’s MPC and ECB meetings. However, the central banks, as expected, left their key rates on current levels– 4.5% and 2.7% accordingly. Main currency pairs haven’t done big moves and reacted obviously on a data remaining in a narrow ranges almost all trade day.
ECB President Jean-Claude Trichet speech at press-conference became the main catalyst of today’s movements. He confirmed the necessity of June8 rate hike. He also repeated his key phrase about the vigilance on price stability in a region. Trichet believes rate hikes fuel growth by containing inflation expectations. This bolstered speculations on further ECB rates lift and prospects of EUR advances. USD came under pressure versus main currencies on bullish Trichet's comments. Besides EUR gains were limited as market players started doubt after Trichet said “ ECB didn’t lift rates this day. The next time- “will be seen”.
Remind, this year EUR rose 7.7% versus dollar on speculations ECB further tightening.

EUR/USD traded in a range $1.2720/45 in the morning. Then the rate began to raise, as a results it tested resistance $1.2780. Recoil didn’t follow. Day closed on $1.2776.
GBP/USD remained in a narrow range $1.8340/70. In the afternoon rate climbed to $1.8410. Offers were the reason of recoil to $1.8370/80, where trades closed.
USD/JPY remained within the limits Y115.35/65. Then the rate moved sharply lower to Y114.90. The rate couldn’t overcame this level and rolled to Y115.10. Day closed here.

BOJ Chairman Fukui’s speech on Japanese economy expansion supported the yen. His comments bolstered speculations BOJ can lift key rates at the meeting next week. Thus yen gains can by limited by fears on further missiles launching by North Korea. Yesterday yen droped to 2-weeks lows after a message that 7 ballistic missiles fell in Japan Sea.