The dollar strengthened reaching new 12 year highs against its peers today on the back of favorable US jobless claims figures and as the European Central Bank presented its new full on stimulus measure. The US Department of Labor reported that for the week ending January 17 the number of jobless claims decreased from the previous week’s total of 317,000 to 307,000 while experts and forecast a total of 300,000.

The euro weakened considerably against the dollar following the announcement from ECB President Draghi which confirmed beginning in March until late next year monthly purchases totaling 60 billion euros each month. Draghi recognized that measures undertaken last year were not effective enough to combat the risk of euro zone deflation. Last month the annual rate of inflation for the euro zone fell 0.2% to negative figures. Draghi pointed out that cheaper oil prices should help bolster a broader recovery.

The pound weakened against the dollar after the Confederation of British Industry revealed that its index of industrial orders expectations dropped from 5 in December to 4 for January while experts had forecast the index to be unchanged. The Office for National Statistics reported that UK public sector borrowing increased to 12.47 billion pounds in December while a drop to 9.7 billion pounds was forecast.

After the Bank of Japan made no adjustments to its current policy yesterday which briefly boosted the yen a selloff followed. The pair came off over 0.25% today and is still range bound now trimming losses closing in on its 119 handle.

The Swiss franc weakened against the dollar with the pair rallying well over 1%.

Commodity associated currencies were varied against the dollar. The Australian dollar strengthened against the dollar after data revealed that Australian new home sales jumped 2.2% in November following a rise of 3.0% for October. The Melbourne Institute released its forecast for inflation for this year which dropped from 3.4% in November to 3.2% in December. The New Zealand dollar weakened against the dollar trading near 2.5 year lows while the Canadian dollar strengthened still trading near its 6 year low against the dollar.

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