Both euro and British pound pushed higher against the U.S. dollar during European trades Thursday, ahead of policy decisions and guidance from the European Central Bank and Bank of England , due later in the day. The Euro strengthened from near a five-week low against the dollar ahead of the ECB policy-making meeting amid bets policymakers will refrain from increasing stimulus amid signs the region is recovering, despite week inflation data released earlier this week. The ECB will be in focus after data earlier this week showed annual rate of the consumer price index (CPI) in the single-currency region eased to 0.8% in December, adding to concerns that the region could suffer from deflation and increasing pressure on the ECB to take more action to support the economy. Against the dollar, the euro rose 0.27 percent to trade at $1.36100 after opening at $1.35746 . The single currency also edged higher against the yen where the EURJPY pair rose to trade near ¥142.902 after opening at 142.307. The pound extended gains on Thursday, approaching a two-year high versus the dollar following slightly better than expected UK trade report. Data showed that Britain's trade deficit narrowed slightly more than expected in November as exports to Europe picked up. However, gains might be capped as investors remained cautious ahead BoE meeting later today and Friday's U.S. jobs report for December. Investors are likely to focus on the Bank of England which also convenes for its policy meeting later today, amid mounting expectations that governor Mark Carney will not change the threshold for considering interest rate rises within months. GBPUSD pair touched highs of 1.64788, the strongest level since January 2 and was last up 0.06 percent against the dollar at 1.64564. Cable was likely to find support at 1.6370 and resistance at 1.6550. Dollar reversed gains set yesterday after the Federal Reserve minutes which showed officials wanted to proceed with its decision in the $85 billion monthly asset purchases, while solid economic data seemed to indicate that the Fed is likely to continue cutting its stimulus. Fed's minutes came on the heels of a report showing that the U.S. private sector showed that private-sector payrolls showed private sector employment to have increased more than expected in December, adding to signs of recovery in the U.S. economy and the labor sector in particular. The week ahead also will also see a raft of speeches from officials of the Federal Reserve on Thursday as well as the closely-watched December non-payrolls data on Friday. The key non-farm payrolls figure is forecast to drop to 195,000 from 203,000. The overall unemployment rate is expected to remain unchanged at 7.0 percent in December. The dollar index last stood at 80.10, after opening at 81.20. The USDIX index so far hit a session high at 81.24 and low at 81.04. Australia's currency dropped 0.24 percent to 0.88811 U.S. cents, after opening at 0.88959. Japanese yen extended losses to trade near ¥104.983, down by 0.12 percent versus the greenback.
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