Forexpros – The U.S. dollar turned sharply higher against its major counterparts on Thursday, after European Central Bank President Mario Draghi disappointed expectations that the central bank would step up its bond buying program.
During U.S. morning trade, the dollar was up against the euro, with EUR/USD dropping 0.72% to hit 1.3311.
At the ECB’s post policy meeting press conference earlier, Draghi outruled the possibility of working with the International Monetary Fund on a rescue package and said the central bank could not give monetary financing to governments.
Draghi also stopped short of giving any commitment to increased purchases of government bonds, saying the bank’s bond purchasing program was “neither eternal nor infinite”.
The ECB did unveil new measures to increase liquidity, including unlimited 36-month credit for euro zone banks, the easing of collateral requirements for ECB loans and a reduction in the reserve requirement for commercial lenders.
The announcement came after the ECB cut its benchmark interest rate by 0.25%, bringing rates to a record low of 1%.
The greenback was also higher against the pound, with GBP/USD declining 0.50% to hit 1.5630.
Earlier in the day, the Bank of England kept interest rates steady at a record low 0.5%, where they have been since March 2009 and announced no change to its asset purchase program, which it increased to GBP275 billion in October.
Elsewhere, the greenback was lower against the yen but higher against the Swiss franc, with USD/JPY retreating 0.18% to hit 77.53, and USD/CHF advancing 0.47% to hit 0.9279.
The greenback was also higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD surging 0.83% to hit 1.0181, AUD/USD tumbling 0.98% to hit 1.0190 and NZD/USD declining 0.71% to hit 0.7741.
In Canada, a report showed that housing starts declined more-than-expected in November, falling to 181,000 units from 209,000 the previous month.
A separate report showed that new house price inflation in Canada rose less-than-expected in October by 0.2%.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.68% to hit 79.00.
Also Thursday, the U.S. Department of Labor said that the number of people who filed for unemployment assistance in the U.S. last week fell to the lowest level since late February, tumbling to 381,000 after a reading at 404,000 the previous week.
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