Investing.com - The dollar rallied over 1% against the other major currencies on Thursday, after the European Central Bank cut interest rates across the euro zone to new record lows and boosted its quantitative easing program.
EUR/USD tumbled 1.52% to 1.0833.
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.
ECB President Mario Draghi was to outline the factors affecting the monetary policy decision at the post-policy meeting press conference later Thursday.
At the same time, the U.S. 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 gained 0.91% to 114.36.
The dollar also moved higher against the pound and the Swiss franc, with GBP/USD down 0.63% at 1.4127 and with USD/CHF rallying 1.16% to 1.0091.
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 0.23% at 0.7467, while NZD/USD held steady at 0.6654.
The kiwi recovered from earlier losses posted after 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 gained 0.39% to 1.3297.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 1.23% at 98.40, the highest since March 2.