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Dollar holds gains after U.S. data, central banks

Published 09/05/2013, 09:09 AM
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Investing.com - The U.S. dollar remains broadly higher against the other major currencies on Thursday, after the release of mixed U.S. employment data and as the Bank of England and the European Central Bank left monetary policies unchanged.

During European afternoon trade, the dollar climbed higher against the euro, with EUR/USD retreating 0.44% to 1.3148.

In a press conference following the ECB's monthly policy meeting, Mario Draghi said the central bank's monetary policy will remain accomodative for as long as necessary and that interest rates should remain at present or lower levels for an extended period of time.

The ECB also revised its 2013 growth projections for the euro zone to a 0.4% contraction from a previously estimated 0.6% contraction in June.
The comments came after the ECB held its benchmark interest rate at a record-low 0.5%, in line with market expectations.

In the U.S., the Department of Labor said the number of people filing for initial jobless benefits in the week ending August 30 fell by 9,000 to a seasonally adjusted 323,000, compared to forecasts for a decline of 2,000.

The data came after an ADP report showing that 176,000 jobs were created in the U.S. private sector in August, less than the expected 180,000 increase, after a downwardly revised 198,000 rise the previous month.

The greenback was fractionally higher against the pound, with GBP/USD easing 0.08% to 1.5612.

In a widely expected move, the BoE held its benchmark interest rate at 0.50% and kept the size of its asset purchase program unchanged at GBP375 billion.

Last month, the BoE had pledged to keep rates on hold at record lows until the U.K. unemployment rate falls below 7%, something the bank sees as unlikely to happen for another three years.

Elsewhere, the greenback was steady against the yen, with USD/JPY inching 0.03% higher to trade at 99.76, and higher against the Swiss franc, with USD/CHF gaining 0.71% to 0.9420.

At the end of its two-day policy meeting, the Bank of Japan said it will expand the monetary base at an annual pace of JPY60 trillion to JPY70 trillion, leaving policy unchanged.

The central bank also upgraded its assessment of the economy, saying a moderate recovery is underway.

The greenback was mixed to higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.09% to 1.0486, AUD/USD shedding 0.38% to 0.9139 and NZD/USD falling 0.19% to 0.7891.

Official data earlier showed that Australia's trade balance unexpectedly swung into a deficit of AUD0.77 billion in July, from a downwardly revised surplus of AUD0.24 billion the previous month.

Analysts had expected the trade surplus to narrow to AUD0.05 billion in July.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.38% to 82.52.

Investors remained cautious after the U.S. Senate's Foreign Relations Committee approved a resolution on authorizing limited U.S. military intervention in Syria. The full Senate is expected to vote on military action on September 9.

Later in the day, the ISM was to release data on non-manufacturing activity in the U.S.


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