Forexpros – The U.S. dollar turned sharply lower against the other major currencies on Thursday, after European Central Bank President Mario Draghi pledged to do everything in his mandate to save the euro, boosting investor demand for higher-yielding assets.
During European afternoon trade, the dollar weakened against the euro, with EUR/USD jumping 0.97% to 1.2274.
In a speech in London, Draghi also appeared to indicate that the ECB would be prepared to intervene to lower Spanish and Italian bond yields, saying that government borrowing costs would fall within the central bank’s mandate if they interfered with the ‘transmission’ of monetary policy.
The yield on Spanish 10-year bonds dropped back to 6.99% from a session high of 7.38% following the remarks, while the yield on Italian 10-year bonds pulled back to 6.06%.
The greenback was also down against the pound, with GBP/USD up 1.03% to 1.5654.
Elsewhere, the greenback edged lower against the yen, with USD/JPY dipping 0.03% to 78.12 and posted steep losses against the Swiss franc, with USD/CHF dropping 0.92% to 0.9787.
The greenback was sharply lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD down 0.79% to 1.0075, AUD/USD gaining 0.96% to trade at 1.0404 and NZD/USD jumping 1.24% to 0.7987.
The Reserve Bank of New Zealand kept its benchmark interest rate unchanged at 2.5% earlier Thursday and said there was still a “limited” risk that conditions in the euro zone could deteriorate significantly.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dropped 0.79% to 83.02.
Later in the day, the U.S. was to release official data on durable goods orders and initial jobless claims, as well as industry data on pending home sales.
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