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Dollar hits session highs vs. euro after ECB

Published 02/07/2013, 11:16 AM
Updated 02/07/2013, 11:16 AM

Investing.com - The dollar hit session highs against the euro on Thursday after European Central Bank President Mario Draghi said the bank will monitor the strength of the euro but that the exchange rate was not a policy target.

During U.S. morning trade, the greenback hit session highs against the euro, with EUR/USD down 0.89% to 1.3400.

The single currency weakened broadly after Draghi said the ECB would closely monitor developments in the markets to see if the stronger euro had an effect on inflation projections.

Speaking at the bank’s post-policy meeting press conference, Draghi said that economic weakness in the euro are would persist during the early part of 2013 but said the economy should start to recover “later” in the year.

The ECB left interest rates at 0.75% earlier Thursday, in line with market expectations.

The greenback was lower against the pound, with GBP/USD rising 0.26% to 1.5698.

Earlier Thursday, the Bank of England left its benchmark interest rate unchanged at 0.5%.

The BoE took the unusual step of releasing a rate statement following the policy meeting. The bank said it was appropriate to look beyond the fact that inflation is currently running above target, as removing stimulus would risk derailing the recovery.

The dollar remained supported close to two-and-a-half year highs against the yen, with USD/JPY down 0.32% to 93.33 as expectations for more aggressive easing measures by the Bank of Japan continued to weigh on the yen.

Elsewhere, the greenback was higher against the Swiss franc, with USD/CHF rallying 0.70% to 0.9166.

The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD up 0.27% to 0.9981, AUD/USD slipping 0.12% to 1.0306 and NZD/USD dropping 0.80% to 0.8328.

In Canada, official data showed that the number of new building permits issued dropped for a second successive month in December, falling 11.2% compared to expectations for a 5% increase.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.55% to 80.24.

In the U.S., the Department of Labor said the number of people filing for unemployment benefit last week fell by 5,000 to a seasonally adjusted 366,000, compared to expectations for a decline of 11,000 to 360,000.

Jobless claims for the preceding week were revised up to 371,000 from a previously reported gain of 368,000.



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