The euro was under pressure in early morning trade after the ECB said it would no longer accept Greek bonds as collateral for lending, increasing pressure on the Greek central bank to provide liquidity for its lenders.
French President Francois Hollande said the European Central Bank's decision to no longer accept Greek debt as collateral for lending to banks is legitimate and pushes European governments and Greece to negotiate a new program for the country.
EUR/USD moved over 1% throughout the course of the day rising from the morning low of 1.1313 to trade as high as 1.1457 this was after US jobless data and disappointing trade balance report pushed USD lower against most of its major trading pairs.
The European Union believe the recent sharp drop in global oil prices and the weaker euro should boost growth in the Eurozone in 2015 and raised their forecasts for Germany, France and Spain .The forecasts don't yet account for the possibility of Greece throwing a spanner in the works by asking for the ECB to rewrite their bailout plan.
Decembers US trade gap rose 17.1% to $46.56 billion as Americans bought more goods from overseas and exports fell.
US new claims for unemployment benefits rose 11,000 last week to a seasonal adjusted 278,000 and remain at levels consistent with solid job growth. The number of people filing continuing claims for benefits rose by 6,000 to 2.4 million.
Swiss officials have warned that the recent scrapping of the central bank's cap on the Swiss franc may harm Switzerland's exporters, increase unemployment and even tip the economy into a recession should the recent strength in the franc persist. The euro rose to the highest level against the franc yesterday upon speculation the Swiss National Bank will actively weaken their currency.
Denmark's central bank has cut its interest rates for the fourth time in 3 weeks to -0.75%, in an effort to keep the krone pegged to the euro.
Australia's central bank lowered both its medium-term forecasts for inflation and economic growth, saying the economy won't grow fast enough in the next year to prevent a further rise in unemployment. The RBA cut interest rates on Tuesday to a record low of 2.25%, its first cut since August 2013. GBP/AUD has opened at 1.9567.
UK News
The Bank of England held interest rates at 0.5% yesterday as lower oil prices push inflation further below target, this is despite continued strong UK economic growth and falling unemployment.
GBP/EUR traded within a cent range hitting a morning high of 1.3408 before dropping to the session low of 1.3311 the pair then recovered in the afternoon to end the day at the 1.3380 level.
GBP/USD rose steadily throughout the day moving from the morning low of 1.5165 to trade as high as 1.5314. The pair have opened at 1.5324.
The European Commission stated low energy prices and a strong pound will keep inflation in the UK lower than previously expected, they forecast inflation in the UK will be 1% in 2015 from 1.6% they expected back in July and believes it will rise again to 1.6% in 2016.
