Investing.com - The dollar rose to 14-month highs against a basket of other major currencies on Thursday as the euro weakened broadly after the European Central Bank cut euro zone interest rates and unveiled an asset-backed securities program.
EUR/USD hit 1.2996, the lowest level since July 15 2013 and was last down 0.96% to 1.3022.
The euro fell sharply after the ECB cut its benchmark interest rate to a record-low 0.05% from 0.15%, surprising most market analysts who had expected no change.
The central bank also lowered its deposit facility rate to -0.20% from -0.10% previously and its marginal lending rate to 0.30% from 0.40%.
The euro extended losses after ECB President Mario Draghi said the bank will begin an asset-backed securities program, in a bid to shore up the recovery and bolster slowing inflation.
The ECB cut its forecast for growth this year to 0.9% down from 1.0% previously and cut the forecast for 2015 to 1.6% from 1.7%. The bank also lowered its inflation forecast for this year to 0.6% from 0.7% in June.
The dollar rallied to one year highs against the Swiss franc, with USD/CHF surging 0.87% to 0.9257. The greenback pushed higher against the yen, with USD/JPY up 0.15% to 104.93, holding below Wednesday’s eight month highs of 105.30.
In the U.S., the ADP nonfarm payrolls report showed that the private sector added 204,000 jobs in August, missing expectations for jobs growth of 220,000.
Another report showed that the number of people who filed for unemployment assistance in the U.S. last week rose by 4,000 to 302,000 from the previous week’s total of 298,000.
Analysts had expected jobless claims to rise by 2,000 to 300,000 last week.
At the same time data showed that the U.S. trade deficit narrowed to the lowest in six months in July.
The pound remained close to seven month lows, with GBP/USD down 0.15% to 1.6434.
Sterling held steady after the Bank of England kept monetary policy unchanged on Thursday, as widely expected.
Uncertainty over the outcome of a vote on Scottish independence due to take place later this month continued to weigh on the pound.
AUD/USD added 0.42% to trade at one month highs of 0.9380, while NZD/USD rose 0.13% to 0.8335. USD/CAD was down 0.44% to 1.0840.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.64% to 83.40, the highest level since July 2013.