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The Australian dollar spiked on Thursday in Asian trade as retail sales for January posted the biggest jump since February 2013 and the country''s trade balance had its biggest surplus since August 2011.

Australia retail sales for January rose 1.2%, compared with a 0.5% increase expected quarter on quarter and at the same time the country''s trade balance for January widened to A$1.43 billion, from an expected surplus of A$270 billion.

AUD/USD traded at 0.9012, up 0.31%, from flat before the data. Elsewhere in Asia, USD/JPY traded at 102.65, up 0.34%, on expectations for continued easy policy by the Bank of Japan.

Concern over tension between Russia and the Ukraine has continued to wane. Attention in Asia now turns to China with the National People''s Congress meeting underway iuntil March 13, a yearly gathering of top government officials. The country''s Premier Li Keqiang on Wednesday called for more flexibility in the yuan trading band and that the country was sticking to a goal to reach 7.5% GDP growth this year.

Investors are also looking for direction on a looming debt crisis in the country as access to easy credit tightens with immediate concern focused on Shanghai Chaori Solar Energy Science & Technology Co, which makes solar cells and panels, and announced late Tuesday that it won''t be able to repay about 89.8 million yuan ($14.6 million) interest on a 1 billion yuan bond issued two years ago. Its stock has been suspended from trade.

Some concerns have been raised it could be the first of many such companies to default on sub-prime debt.

Overnight, the U.S. dollar slumped after the Institute of Supply Management said its services purchasing managers'' index fell to a 43-month low of 51.6 last month from 54.0 in January. Analysts had expected the index to tick down to 53.5 in February.

The soft showing sent investors rethinking the pace at which the Federal Reserve will taper its monthly bond-buying stimulus program, which weakens the dollar by suppressing long-term interest rates.

Investors shrugged off payroll processor ADP''s nonfarm payrolls report, which revealed that the U.S. private sector added 139,000 jobs in February, below expectations for an increase of 160,000.

Elsewhere, Fed Chair Janet Yellen said earlier the U.S. central bank will do all it can to ensure U.S. recovery remains on track, as the economy is still not as healthy as it should be.

"I will also continue the work of helping repair the damage done by the financial crisis to the economy. Too many Americans still can''t find a job or are forced to work part-time. The goals set by Congress for the Federal Reserve are clear: maximum employment and stable prices," Yellen said in prepared remarks at a swearing-in ceremony in Washington earlier.

"It is equally clear that the economy continues to operate considerably short of these objectives. I promise to do all that I can, working with my fellow policymakers, to achieve the very important goals Congress has assigned to the Federal Reserve."

Investors avoided the single currency and remained on the sidelines to await the ECB’s policy statement on Thursday, which gave the dollar some support.

Concerns persisted that the monetary authority could take steps to help shore up the region''s still-fragile recovery, which overshadowed otherwise positive data.

Data on Wednesday revealed that the final euro zone composite purchasing managers’ index was revised up to a 32-month high of 53.3 from a preliminary estimate of 52.7.

The euro area services PMI rose 52.6 in February from 51.6 in January and higher than the flash estimate of 51.7.

Germany’s composite PMI soared to a 33-month high but France’s fell to a two-month low. Italy’s service sector grew to an almost three-year high last month.

Separately, Eurostat, the European Union''s statistical arm, reported that retail sales in the euro zone rose 1.6% in January, blowing past expectations for a 0.8% gain.

On-year retail sales grew 1.3%, defying expectations for a 0.4% decline.

Separate data confirmed that the euro zone economy expanded 0.3% in the fourth quarter and grew 0.5% on a year-over-year basis, both figures in line with expectations.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.07% at 80.11.

On Thursday, the U.S. is to publish the weekly report on initial jobless claims and data on factory orders. Canada is to publish a report on building permits and the Ivey PMI.



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