Forex: Thursday’s review

The euro approached a 10-month high against the dollar as a result of placement of bonds of Spain in the amount 4.505 billion euros, which corresponds to the top of the targeted range of 3.5-4.5 billion euros, the cost of borrowing has fallen, which also led to increased confidence in European debt market.

The cost of the single currency rose against all 16 major peers, while the yen fell to its weakest level since 2010 against the dollar, as the newspaper learned that the Bank of Japan (8301) is preparing for further stimulation as early as next week. It is expected that the government will launch a program of asset purchases and unrestricted will use it for as long as inflation does not reach the target mark of 2.0%. The Central Bank will also consider reducing the lower limit of the range of short-term interest rates to zero, and, possibly, lower. In addition, the Minister of Economy, Akira Amari told reporters that his comments that excessive weakening currency was harmful, were misinterpreted. He added that the yen continues to suffer from over-capacity.

The Swiss franc fell to its weakest level against the euro since September 2011, when the central bank introduced a limit on the franc's exchange rate at CHF1, 2 euro. Swiss currency fell against all 16 most-traded currencies, except the yen as speculation that the debt crisis in Europe weakened, undermined the demand for assets seekers.

Earlier, the dollar regained some of its losses against the euro after data showed that housing starts in the U.S. grew by 12.1% last month, which was more than expected. At the same time, another report showed that the number of initial claims for unemployment benefits fell last week to 335,000 while still achieving the lowest level since January 2008.

The Australian dollar fell against most major currencies after a report showed that employers in the country unexpectedly cut jobs in December at 5,500, compared with estimates economist at 4000 people.