EURUSD consolidated losses during the U.S. trading session after having dropped over 120 pips in European trading hours amid growing concerns over the euro zone debt crisis sparked again by rising Spanish bond yields. The 10year bond yield rose to the highest level since December, reaching 5.78 percent today. The stronger dollar after positive U.S. economic data pressured the euro further. The U.S. jobless claims report showed claims fell to the lowest level in four years, slipping to 357,000 in the latest week from 363,000. EURUSD reached lows of 1.3034.
The broadly stronger dollar lifted the ICE dollar index to its highest level in three weeks. The index which measures the dollar against a basket of six currencies, rose to 80.101, from 79.764 late Wednesday. The focus turns to the key U.S. non farm payrolls data due on Friday.
The Canadian dollar strengthened against its U.S. counterpart after the release of a surprisingly upbeat Canadian jobs report, causing the CAD to rally. Canada created an additional 82,300 jobs in March, which was eight times more than forecast for a 10,500 net increase. This dropped the unemployment rate down to 7.2 percent from 7.4 percent, also beating expectations. USDCAD fell to 0.9906 versus an earlier high of 0.9996.
Sterling steadied against the dollar after the Bank of England policymakers voted to keep interest rates on hold at 0.5 percent. Earlier in the day, GBPUSD fell sharply to 1.5816 on weak UK manufacturing data, the traded a range in the New York session at around those levels.
USDJPY bounced to a high of 82.42 from 81.81, while USDCHF hit a fresh three-week high of 0.9221, rising steadily form the European session low of 0.9142.
The euro steadied against the Swiss franc after briefly breaching the 1.20 francs-per-euro floor in European trading. EURCHF reached 1.1996. But the Swiss National Bank announced it will defend the floor no matter what, and euro was bought up, to bring it back above the floor, last trading above 1.2014.