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    Greenback recovers losses after ECB’s decision

    The U.S. dollar strengthened against its major counterparts on Friday, as it recovered from losses registered after the president of the ECB stated that the central bank did not anticipate trimming rates further.

    The single currency found support following Mario Draghi’s comments on Thursday that the ECB did not believe it will be necessary to cut interest rates further in the future, although added that this could change.

    However, demand for the euro remained fragile, as the central bank reduced its benchmark interest rate to 0.00% from 0.05%, surprising market participants as they had been expecting no change.

    The ECB also trimmed the deposit facility rate to minus 0.4% and reduced the marginal lending rate to 0.25% from 0.30%. What is more, the bank strengthened its quantitative easing programme by €20 billion per month to €80 billion taking effect in April. In the aftermath of the news today , the euro retreated at 1.1080, the session’s low, to reach 1.1149 during the North American early trade, still lower 0.26%.

    The greenback was down against the sterling, with GBP/USD rising 0.08% at 1.4293, near previous day’s three week-high of 1.4321. Meanwhile, it was higher against the franc and the Japanese yen, with USD/CHF gaining 0.17% to 0.9865 and the USD/JPY rising 0.55% to 113.82. 

    The U.K. Office for National Statistics reported the trade deficit narrowed to £10.29 billion in January from £10.45 billion in December, whose reading was upwardly revised from an initial estimate of £9.92 billion. The median estimate anticipated the trade deficit to be £10.30 billion. 

    Elsewhere, the Australian and New Zealand dollars were higher, with AUD/USD climbing 0.74% at 0.7509 and the NZD/USD increasing 0.31% to 0.6688. The USD/CAD pair eased 0.63% at 1.3262, as demand for the commodity-linked currency was boosted with the rise of oil prices, hitting three-month highs at $38 a barrel.

    The U.S. dollar index, which tracks the greenbacks performance against a group of six other currencies, gained 0.48% at 96.65, higher than the previous session’s one-month bottom of 95.94. 

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