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Dollar Exhibits Weakness Against Rivals

Dollar Exhibits Weakness Against Rivals

The U.S. dollar exhibited weakness against most major currencies on Thursday, as traders reacted to a slew of global economic data and the monetary policy statements from the Federal Reserve, the Bank of England, Bank of Japan and the Swiss National Bank.

The dollar index eased to a low of 98.20 around mid afternoon, but recovered some lost ground as the session progressed and was at 98.35 by late afternoon.

The dollar weakened to a low of 1.1075 against the euro early on in the session, but recovered to 1.1044 later on in the day, but was still down in negative territory, trailing its previous close by about 0.12%.

Against British Pound Sterling, the dollar dropped to a low of 1.2559 before recovering to 1.2524, limiting its loss to about 0.4%.

The Bank of England retained the interest rate at 0.75% and quantitative easing at GBP 435 billion, as expected.

The Japanese yen was around 108.05 a dollar, after having strengthened to 107.78 earlier in the day after the Bank of Japan maintained its monetary policy, but reiterated its willingness to pursue additional easing measures to support the economy.

The BoJ maintained interest rate at -0.1% on current accounts that financial institutions maintain at the bank.

The bank said it will purchase government bonds so that the yield of 10-year JGBs will remain around zero percent.

The Swiss franc spiked up against its key counterparts, after the Swiss National Bank kept its key policy rate and expansionary monetary policy intact, and tweaked rules for calculating negative interest rates on sight deposits to support banking system.

Against the dollar, the Swiss currency was up nearly 0.5% with the dollar-franc pair at 0.9927.

In the monetary policy assessment, the SNB said it is maintaining its policy rate and the benchmark sight deposit rate at -0.75 percent. The decision was in line with forecasts.

The dollar was down 0.2% against the loonie at 1.3264 and up nearly 0.5% at 0.6795 against the Aussie.

In economic news, data from the Labor Department showed initial jobless claims inched up to 208,000, an increase of 2,000 from the previous week’s revised level of 206,000. Economists had expected jobless claims to climb to 213,000.

A separate report from the Philadelphia Federal Reserve showed a modest slowdown in the pace of growth in regional manufacturing activity in the month of September.

The Philly Fed said its diffusion index for current general activity fell to 12.0 in September from 16.8 in August, although a positive reading still indicates growth in regional manufacturing activity. The index had been expected to drop to 11.0.

A report from the National Association of Realtors showed existing home sales surged up by 1.3% to an annual rate of 5.49 million in August after spiking by 2.5% to a rate of 5.42 million in July. Economists had expected existing home sales to pull back by about 0.4%.

The material has been provided by InstaForex Company – www.instaforex.com