Investing.com - The dollar trade largely lower against most major currencies on Thursday after the European Central Bank left monetary policy unchanged and sparked demand for the euro and other higher-yielding currencies, while hit-or-miss data in the U.S. tarnished the greenback's appeal.
In U.S. trading on Thursday, EUR/USD was up 0.90% at 1.3857.
The ECB left its benchmark interest rate unchanged at 0.5%, as recent data indicated moderate economic recovery in the euro zone.
ECB President Mario Draghi added that he was encouraged by Wednesday data revealing that business activity in the euro zone rose to a 32-month high in February and praised improvements in the services sector, which accounts for the majority of job growth.
Draghi reiterated the ECB’s forward guidance on rates, stressing that interest rates will remain at their present levels or lower for an extended period. The ECB remains determined to maintain the high degree of accommodative monetary policy for as long as needed, and will take further actions as it sees fit, he added.
Still, the decision to leave policy unchanged bolstered the single currency on Thursday.
The central bank revised its forecast for economic growth in 2014 to 1.2% from 1.1% in December.
However, the bank revised down its inflation forecast for this year to 1.0% from 1.1% in December. The bank expects inflation to pick up to 1.3% in 2015 and 1.5% in 2016, remaining below the bank’s target of just under 2%.
Meanwhile in the U.S., the Department of Labor reported earlier that the number of individuals filing for initial jobless benefits last week fell by 26,000 to 323,000 from the previous week’s revised total of 349,000.
Analysts were expecting jobless claims to fall by 11,000 to 338,000 last week.
A separate report showed that U.S. factory orders fell 0.7% in February, compared to expectations for a 0.4% decline.
Elsewhere, the dollar was up against the yen, with USD/JPY up 0.75% at 103.07, and down against the Swiss franc, with USD/CHF down 0.76% at 0.8805.
The greenback was down against the pound, with GBP/USD up 0.11% at 1.6740.
Earlier Thursday, the Bank of England voted to leave U.K. interest rates unchanged at their record low of 0.5%, and also left its quantitative easing program steady at 375 billion pounds, which gave the pound support.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.41% at 1.0984, AUD/USD up 1.20% at 0.9092 and NZD/USD up 0.75% at 0.8479.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.52% at 79.68.
On Friday, the U.S. is to round up the week with its closely watched government data on nonfarm payrolls and the unemployment rate.