The U.S. dollar was weak against most major currencies on Thursday, continuing to be weighed down by the Federal Reserve’s pledge on Wednesday to use its full range of tools to support the economy.
“The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals,” according to the accompanying statement.
The central bank’s emergency credit facilities are “wide open” and “we can do more of that,” Fed Chair Jerome Powell said in a press conference.
Promising trial results of Gilead Sciences’ potential coronavirus treatment remdesivir also contributed to dollar’s weakness.
The dollar index was down nearly 0.6% at 99.00 after having dropped to a low of 98.81 in midmorning trades.
Against the Euro, the dollar dropped to $1.0973 before regaining some lost ground. Still, at $1.0953, it was down more thna 0.7% from previous close.
The euro depreciated against its major trading partners in the European session, after European Central Bank President Christine Lagarde warned of an “unprecedented” downturn in the euro area that is likely to steepen further during this year, and urged coordinated policy action to protect against downside risks and support the recovery.
In her customary press conference, Lagarde said that euro area GDP could fall by between 5% and 12 percent this year, depending on the duration of the containment measures and the success of policies to mitigate the economic consequences for businesses and workers.
Measures to contain the spread of the COVID-19 had largely halted economic activity in all the countries of the euro area and across the globe, the ECB chief said.
Against Pound Sterling, the dollar slipped to $1.2594, down more than 1%.
The Japanese Yen was weaker by more than 0.5%, at 107.22 a dollar, after having closed at 106.67 a dollar on Wednesday.
The Aussie was trading at $0.6516 a dollar, down from $0.6557 on Wednesday.
The Swiss franc at 0.9656 a dollar, firming up from last close of 0.9737 a dollar.
The loonie was changing hands at 1.3942 a dollar, going down by about 0.44%, at 1.3881.
A report released by the Labor Department showed initial jobless claims tumbled to 3.839 million in the week ending April 25th, a decrease of 603,000 from the previous week’s revised level of 4.442 million.
Economists had expected jobless claims to drop to 3.500 million from the 4.427 million originally reported for the previous week.
Personal income in the U.S. tumbled by 2% in March after climbing by 0.6% in February, according to a report released by the Commerce Department. Personal spending plummeted by 7.5% in March after inching up by 0.2% in the previous month.
The material has been provided by InstaForex Company – www.instaforex.com