The euro rallied on Thursday after the ECB's latest easing nECBDEC10G underwhelmed markets that had already priced in the added accommodation and President Christine Lagarde's comments on currency strength failed to inspire fear of further gains.
An unexpectedly large surge in U.S. jobless claims nL1N2IP2DJ added downward pressure to the dollar, supporting EUR/USD gains nL1N2IQ1N1.
The claims data followed last week's news of November's unexpectedly sharp slowing in U.S. job growth and Wednesday's grim pandemic milestone of a record 3,253 COVID-19 deaths nL1N2IQ1H2.
The news increases the pressure on U.S. lawmakers to approve a relief bill to mitigate pandemic economic damage, which could intensify if key existing support programs expire by year-end.
Treasury Secretary Steven Mnuchin said relief talks with senators were making progress nL1N2IQ1SE.
Any fiscal aid before the Fed's Dec.
16 meeting could diminish pressure on the U.S. central bank to provide further accommodation.
The euro received additional support from news that European Union leaders unblocked a 1.8 trillion euro financial package to help the economy recover from the pandemic-induced recessionnL1N2IQ0SL.
The pound tumbled after Wednesday's EU-UK Brexit talks failed to produce a breakthrough, and British Prime Minister Boris Johnson highlighted the strong risk that no deal will emerge by the Dec.
31 deadline nS8N2IO05P.
Sterling and GBP vols are bracing for no-deal, while the market priced in the BoE taking rates negative by May nL1N2IQ1NQ.
If Brexit talks fail, sterling could easily retrace 50% of this year's range to 1.2477, where the weekly cloud top has flattened out.
Talks are continuing into the weekend, but the EU focused on contingency planning to limit disruption in the event of a no-deal Brexit nL8N2IQ1UFnL8N2IQ2SI.
USD/JPY climbed to cloud base resistance before falling back to the daily tenkan line support at 104.21.
It is clinging to its basing pattern of five consecutive days and weeks with higher lows, but Thursday's bearish rejection by the cloud base at 104.59 was a reminder of the primary downtrend since March nL1N2IQ22C.
The aussie and other high-beta currencies exploited U.S. dollar weakness.
AUD/USD cleared the 76.4% Fibo of the 2018-2020 tumble at 0.7516, hitting its highest since 2018.
The falling dollar and rising commodity prices -- even oil, despite massive U.S. inventory builds reported on Wednesday -- favored commodity and higher yielding currencies.
The focus on Friday and into the weekend will be on Brexit and U.S. relief bill efforts.
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