Investing.com - The dollar turned broadly lower against the other major currencies on Thursday, erasing a more than 1% rally after European Central Bank President Mario Draghi said interest rates aren’t likely to be cut again.
EUR/USD rallied 1.43% to 1.1155.
The euro initially weakened after the ECB cut interest rates across the euro zone to new record lows and boosted its quantitative easing program.
The ECB wrong footed markets by cutting its benchmark interest rate to a record-low of zero from 0.05%. Market watchers had been expecting no change.
The central bank also cut the deposit facility rate deeper into negative territory, to minus 0.4% and cut the marginal lending rate cut to 0.25% from 0.30%.
In addition, the ECB boosted its quantitative easing program by €20 billion per month to €80 billion, starting in April.
The bank also said investment grade euro-denominated bonds would become eligible for purchases under its asset purchase program.
But the euro rebounded after Draghi said the ECB did not anticipate that it will be necessary to reduce interest rates further, but added that this could change.
In the U.S., the Department of Labor said the number of individuals filing for initial jobless benefits in the week ending March 5 decreased by 18,000 to 259,000 from the previous week’s total of 277,000.
Analysts expected jobless claims to fall by 2,000 to 275,000 last week.
USD/JPY eased up 0.09% to 114.43.
The dollar turned lower against the pound and the Swiss franc, with GBP/USD up 0.51% at 1.4288 and with USD/CHF tumbling 1.13% to 0.9860.
Earlier Thursday, British Prime Minister David Cameron warned that a U.K. exit from the European Union would put pressure on sterling.
Meanwhile, the Australian dollar was lower, with AUD/USD down 0.44% at 0.7452, while NZD/USD added 0.17% to 0.6665.
Earlier Thursday, the Reserve Bank of New Zealand unexpectedly lowered its benchmark interest rate to 2.25% from 2.50% and signaled the possibility for further rate cuts to come.
USD/CAD rose 0.25% to 1.3285.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.84% at 96.38, the lowest since February 15, after hitting one-and-a-half week highs of 98.42 earlier in the session.