Investing.com - The dollar fell to the lowest levels since December against the euro on Thursday after the European Central Bank refrained from tightening monetary policy, saying the inflation outlook did not support such a move.
EUR/USD hit 1.3858, the highest level since December 27 and was last up 0.83% to 1.3846.
The euro rallied after ECB President Mario Draghi confirmed that the bank left its benchmark interest rate unchanged at 0.5%, with the latest economic data indicating that “the moderate economic recovery in the euro zone is proceeding.”
Draghi reiterated the ECB’s forward guidance on rates, saying that interest rates will remain at their present levels, or lower for an extended period.
The central bank revised its forecast for economic growth in 2014 to 1.2% from 1.1% in December, but revised down its inflation forecast for this year to 1.0% from 1.1% in December.
Elsewhere, USD/JPY rose to 103.17, the highest since January 29 and was last up 0.71% to 103.01, extending its pullback from a trough of 101.19 reached on Monday, as concerns over the crisis in Ukraine weighed.
The dollar was slightly lower against the pound, with GBP/USD rising 0.11% to 1.6739.
Earlier Thursday the Bank of England left U.K. interest rates unchanged at their record low of 0.5%, and also left its quantitative easing program steady at 375 billion pounds.
The dollar was sharply lower against the Swiss franc, with USD/CHF down 0.67% to 0.8812.
The U.S. dollar fell to two-week lows against the Canadian dollar, with USD/CAD down 0.57% to 1.0965 after Statistic Canada reported that the number of new building permits issued in January rose 8.5%, well ahead of forecasts for a 1% gain.
The Australian dollar rallied to three-month highs, with AUD/USD surging 1.14% to 0.9085. Australia’s dollar was boosted by stronger than expected domestic data on retail sales and trade. NZD/USD was up 0.80% to a four-and-a-half month high of 0.8482.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.50% to a five-month low of 79.71.
In the U.S., the Department of Labor said 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 had expected 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.