EUR/USD Above 1.1250 as Yields Spike

The euro continued riding high on Thursday thanks to a spike in euro zone debt yields, while Asian stocks rose on hopes that Greece could be inching closer to a deal that would save it from default.  The European common currency rode the momentum gathered overnight when the European Central Bank, in line with recent data suggesting deflationary pressures were not as pronounced as feared, raised its inflation forecast for 2015.

ECB President Mario Draghi followed up by saying the central bank saw no reason to adjust its monetary policy stance following the recent surge in European bond yields.  The prospect of the ECB not front-loading its bond purchases pushed euro zone yields up and propelled the euro higher.

The benchmark German 10-year Bund yield DE10YT=RR climbed to within a hair of 0.90 percent overnight, from around 0.50 percent at the start of the week.  The euro was steady at $1.1262 EUR=, having rallied about 2.5 percent so far this week.