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Dollar broadly lower ahead of Draghi comments

Published 09/06/2012, 08:19 AM
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Investing.com - The U.S. dollar was broadly lower against the other major currencies on Thursday, as investors turned to a press conference by European Central Bank President Mario Draghi with hopes he will announce further steps to tackle the euro zone’s debt crisis.

During European afternoon trade, the dollar was hovering close to a two-month low against the euro, with EUR/USD rising 0.22% to 1.2630.

Markets were eyeing comments by Mario Darghi at the central bank’s post-policy meeting press conference later in the day, after the ECB left the benchmark interest rate unchanged at a record-low 0.75%, in a widely expected move.

Demand for the single currency has been underpinned in recent weeks by expectations that the ECB is set to announce more details of measures to help stabilize the region’s sovereign debt markets.

Speculation mounted on Wednesday, after Bloomberg reported that the ECB is planning unlimited purchases of government bonds with maturities of up to three years, without setting bond yield targets.

Also Thursday, France saw bond yields fall at an auction of five- and 10-year government bonds on Thursday, while Spain also saw borrowing costs decline at an auction of two-, three- and four-year government bonds.

The greenback was steady near a three-and-a-half month low against the pound, with GBP/USD inching up 0.06% to 1.5612.

Earlier in the day, the Bank of England held the benchmark interest rate at 0.50%, in a widely expected move, and maintained the stock of asset purchases financed by the issuance of central bank reserves at GBP375 billion.

Elsewhere, the greenback was higher against the yen, with USD/JPY climbing 0.37% to 78.68, but lower against the Swiss franc, with USD/CHF falling 0.16% to trade at 0.9539.

The greenback was down against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.38% to 0.9868, AUD/USD rising 0.42% to trade at 1.0236 and NZD/USD up 0.45% to 0.7978.

In Australia, official data showed that the unemployment rate unexpectedly ticked down to 5.1% in August from 5.2% in July, defying expectations for an increase to 5.3%.

However, the number of people employed fell by 8,800 last month, disappointing expectations for an increase of 5,000.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.12% to 81.14.

Also Thursday, a report showed that U.S. ADP non-farm payrolls rose by 201,000 in August, beating expectations for a 140,000 increase and following a rise of 173,000 the previous month.

Later in the day, the U.S. was to release weekly government data on unemployment claims and a report by the Institute for Supply Management on service sector activity.


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