The euro made modest gains to 1.2935 from 1.2870 (+ 65 points) more on the footsteps of short-covering after having fallen to 1.2845 yesterday and from a spark of optimism that the European policy makers will work to avert a financial crisis in Cyprus that can potentially spread to other eurozone countries.
European shares were higher after three days of losses on Wednesday while the yen fell against the euro which added additional support to the single currency.
Euro-yen rose to 123.40 from 122.35 (+105 points)
Euro Stoxx 50 is up 0.64% to 2,688.96, the German Dax is +0.47% to 7,985 at 11:00am GMT. Nikkei rose 2.03% to 12,468.23.
Cyprus’s finance minister Michael Sarris is currently in negotiation with Russia for assistance to avert a financial meltdown after the parliament rejected the terms of a European bailout, raising the possibility of a looming default and banking system crash in Cyprus.
Sterling rose sharply from 1.5030 to 1.5110 (+80 points) following the results of the Bank of England MPC minutes reversing its earlier decline from 1.5090 to 1.5030.
The Bank of England MPC minutes voted unanimously to keep the benchmark interest rate unchanged at 0.50 percent and to leave the asset purchase program unchanged at 375 billion pounds.
The voting remained unchanged from February with a split 6-3 on QE. King, Miles and Fisher still back an additional 25 billion pound increase on QE.
The MPC also showed concern over more quantitative easing that might lead to an unwarranted depreciation of sterling. They will also monitor inflation expectations closely.
The U.K. claimant count unemployment for February fell less-than-expected, and added further impetus to sterling to 1.5158 from 1.5110. (+48 points)
The jobless claims fell by 1,500 versus the median forecast of 5,000 following a 10,000 decline in January.