Risk appetite improved after the Fed’s bold efforts to bolster local governments and small and mid-sized businesses.
The central bank’s announcement came as data showed that U.S. jobless claims topped 6 million for the second straight week. Businesses are closed across the country in an attempt to stem the spread of the virus.
U.S. President Donald Trump said Americans might be getting to the top of the “curve” and he would like to reopen the economy with a “big bang”. But the death toll first needed to be heading down.
The Federal Reserve rolled out a $2.3 trillion package in its latest move to keep the U.S. economy intact against the pancemic.
The Fed said it would work through banks to offer 4-year loans to companies of up to 10,000 employees. The Fed would directly buy the bonds of states and more populous counties and cities to help them respond to the health crisis.
Investors awaited U.S. jobless claims data later in the day, expected to show a jump to 15 million in the last three weeks. Economists have forecast weekly of 5.25 million.
European stocks were trading 1.8% higher and were poised for their best weekly performance since 2011.
START TRADINGForex – Fed’s bold efforts boost sentiment
Most markets will be closed for Good Friday on April 10. Currencies perceived as riskier bets consolidated recent gains. Commodities-exposed currencies gained on expectations the world’s largest oil producers would cut production at an OPEC+ meeting later on Thursday.
The dollar edged down 0.1% against major currencies before the U.S. jobless figures. The greenback had rallied nearly 9% between March 9-20 to more than a three-year high, before declining nearly 3%.
The dollar index measuring the greenback against a basket of currencies fell to a one-week low of 99.50.
The dollar dipped 0.15% against the Japanese yen to 108.81 yen.
The Australian dollar continued to outperform on Thursday, gaining 1.11% to $0.6295, the highest in over three weeks.
The euro edged up 0.64% versus the dollar. Investors expect that talks between euro zone finance ministers later on Thursday would result in agreement on a half-a-trillion support package to fight the virus.
The pound climbed to a three-week high of $1.2481. Sterling extended gains, rising 0.8% as the dollar fell broadly against its rivals.
Oil prices rose on Thursday on expectations OPEC and its allies will agree to cut output to shore up prices.
Gold prices climbed 1% on Thursday on safe-haven buying ahead of a long weekend and a crucial meeting of top oil producers.
Spot gold was up 0.9% at $1,660.38 per ounce by 1205 GMT, having hit a four-week high of $1,671.40 on Tuesday. It has risen more than 2.6% this week. U.S. gold futures rose 1.3% to $1,706.50.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money