By Natsuko Waki and Steven C. Johnson
LONDON/NEW YORK Feb 6 The euro rose against the
dollar on Thursday after the European Central Bank gave no sign
of an imminent interest rate cut while better-than-expected U.S.
unemployment data helped lift major world stock prices.
Relative calm in vulnerable emerging markets such as Turkey
and South Africa also supported riskier assets and drew
investors away from safe-haven U.S. and German government bonds.
The ECB left its main interest rate at 0.25 percent Thursday
but the central bank's president, Mario Draghi, surprised
markets by not signalling a near-term rate cut during remarks to
reporters despite deflation worries in the 18-country euro zone.
Draghi's remarks sent the euro, which had lost ground
against the dollar immediately after the decision, to a one-week
high of $1.3619 before easing to $1.3608 and pushed up
German bund yields.
"While he reiterated that risks for economy remain to the
downside and that inflation pressures are likely to remain
subdued, he has not taken any meaningful step closer to easing
monetary policy," said Omer Esiner, chief market strategist at
Commonwealth Foreign Exchange.
European stocks were up 1 percent on the day, while
U.S. stocks rose, boosted by data showing fewer Americans than
expected filed for first-time jobless benefits last week.
U.S. jobless claims "are still higher than where they were
six weeks ago but are still consistent with a decent job
market," said Craig Dismuke, chief economic strategist at Vining
Sparks in Memphis. "The underlying trend is still positive."
National U.S. employment data due on Friday is expected to
show the economy added 185,000 new jobs last month.
Smaller-than-expected job gains in December have raised concern
about the strength of the U.S. recovery, which sped up in late
The Dow Jones industrial average was up 133.32
points, or 0.86 percent, at 15,573.55. The Standard & Poor's 500
Index was up 13.51 points, or 0.77 percent, at 1,765.15.
The Nasdaq Composite Index was up 39.05 points, or
0.97 percent, at 4,050.61.
The MSCI world equity index rose 1 percent,
while the yield on benchmark U.S. 10-year Treasuries rose to 2.7
percent after the ECB announcement encouraged risk appetite and
investors positioned ahead of Friday's U.S. jobs report.
Relative calm in the capital-hungry emerging markets of
Turkey, South Africa and India also lifted developing stocks,
after a rout that drove safe-haven bids to U.S. Treasuries and
Emerging stocks were up 1.2 percent after hitting
five-month lows earlier this week, while the Turkish lira
and South African rand held above recent troughs.
The banking sector was in the spotlight after Credit Suisse
missed expectations with a marginal uptick in
fourth-quarter net profit, and its shares were down more than 2
U.S. crude oil rose $1.11 to $98.49 a barrel.