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Euro Extends Gain As ECB's Draghi Says More Details On QE To Reveal In Oct.

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The euro continued to be higher against its key counterparts in early New York deals on Thursday, after the European Central Bank President Mario Draghi lifted the euro area growth forecasts for this year, while signaling that the bank is likely to lay out more details on the QE programme in next policy meeting in October.

In his customary press conference post-ECB decision, Draghi said that underlying inflation have ticked up slightly in recent months and economic expansion continue to be solid and broad-based across countries and sectors.

"The incoming information, including our new staff projections, confirms a broadly unchanged medium-term outlook for euro area economic growth and inflation," Draghi said.

Regarding the QE program, Draghi said that the Governing Council had a 'very preliminary' talk about the measure today and the bulk of the bank's decisions will be taken in October.

The ECB Chief asserted that Eurozone still needs a very substantial degree of monetary accommodation for underlying inflation pressures to gradually build up and support headline inflation developments in the medium term.

The Central Bank lifted its growth forecast to 2.2 percent for this year, up from June projections of 1.9 percent

At its meeting in Frankfurt, the Governing Council kept all its three interest rates unchanged for a twelfth consecutive policy session.

The main refi rate was held at a record low zero percent and the deposit rate at -0.40 percent. The marginal lending facility rate was kept at 0.25 percent.

Data from Eurostat showed that the euro area economy expanded at a slightly faster pace in the second quarter.

Gross domestic product grew 0.6 percent sequentially in the second quarter, faster than the 0.5 percent expansion seen in the first quarter. The rate came in line with the estimate released on August 16.

The currency has been trading in a positive territory in the European session.

The euro added 1.2 percent to hit a 9-day high of 1.2053 against the greenback, from a low of 1.1914 hit at 2:00 am ET. Continuation of the euro's uptrend may see it challenging resistance around the 1.23 region.

Data from the Labor Department showed that the first-time claims for U.S. unemployment benefits rose sharply in the week ended September 2.

The report said initial jobless claims jumped to 298,000, an increase of 62,000 from the previous week's unrevised level of 236,000. Economists had expected jobless claims to rise to 241,000.

The euro appreciated to more than a 4-week high of 1.1482 against the Swiss franc, after having fallen to 1.1382 at 5:15 pm ET. The euro is poised to find resistance around the 1.17 area.

Following more than a 2-week low of 0.9117 hit 8:30 am ET, the euro advanced to a 2-day high of 0.9203 against the pound. The next possible resistance for the euro-pound pair is seen around the 0.94 mark.

Data from the mortgage lender Halifax and IHS Markit showed that UK house prices increased at a faster pace in August.

House prices advanced 2.6 percent year-on-year in three months to August, faster than the 2.1 percent increase seen in three months to July. The annual growth was forecast to stagnate at 2.1 percent.

The 19-nation currency climbed by 0.9 percent to a 6-day high of 131.09 against the Japanese yen, following a decline to 129.93 at 8:30 am ET. On the upside, 132.00 is likely seen as the next resistance for the euro-yen pair.

Survey data from the Cabinet Office showed that Japan's leading index declined more than expected in July.

The leading index, which measures the future economic activity, fell more-than-expected to 105.0 in July from 105.7 in June. The reading was forecast to fall to 105.1.

The single currency spiked up to a 6-day high of 1.4996 against the aussie and a 15-month high of 1.6689 against the kiwi, off its early lows of 1.4873 and 1.6521,respectively. Further uptrend may take the euro to resistance levels of around 1.52 against the aussie and 1.68 against the kiwi.

Reversing from an early low of 1.4524 against the loonie, the euro advanced to 1.4660. The euro is seen finding resistance around the 1.48 area.

by RTT Staff Writer

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