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Dollar mixed on upbeat U.S. data, ECB move, Ebola scare

Published 10/02/2014, 03:54 PM
Updated 10/02/2014, 03:55 PM
Dollar slides on euro's recovery, Ebola scare, though U.S. jobless claims data support
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Investing.com - The dollar traded mixed to lower against most major currencies on Thursday, buoyed by upbeat data out of the U.S. labor market, while pressured lower by an Ebola scare and a European Central Bank decision to hold off on fresh stimulus measures.

In U.S. trading on Thursday, EUR/USD was up 0.40% at 1.2670.

Despite its recent rate cuts and announced plans to buy assets, the European Central Bank concluded on Thursday it would take a wait-and-see approach to current stimulus tools before loosening policy further should the need arise.

ECB President Mario Draghi reiterated that the bank is unanimous in its commitment to using additional unconventional measures if necessary, but a decision to stick with policies in place gave the euro support, which came at the greenback's expense.

Recent data revealed that the euro area's inflation rate slumped to a five-year low of 0.3% in September.

Also on Thursday, Draghi outlined details of its asset-purchasing program announced last month, which will include the purchase of covered bonds beginning this month and asset-backed securities later in the fourth quarter.

The program is to run for two years and will substantially increase the ECB’s balance sheet, he said, adding the program will also help get inflation back to the ECB’s long term target of 2%.

The ECB held its benchmark interest rate at a record-low 0.05%, its marginal lending rate at 0.30% and left its deposit facility rate unchanged at -0.20%.

Meanwhile in the U.S., the Labor Department reported earlier that the number of individuals filing for initial jobless benefits in the week ending Sept. 27 decreased by 8,000 to 287,000 from the previous week’s revised total of 295,000.

Analysts had expected jobless claims to rise by 2,000 to 297,000 last week, which gave the dollar some support.

The data came after payroll processor ADP on Wednesday said that the U.S. private sector added 213,000 jobs last month, slightly ahead of expectations for jobs growth of 210,000.

Investors were now looking ahead to Friday’s U.S. nonfarm payrolls report, which was expected to show that the economy about 215,000 jobs in September.

Elsewhere, news a man traveling from Liberia infected with the Ebola virus arrived in the United States and came into contact with others softened the greenback by stoking market concerns that if general fears grow, traveling and shopping may slow, which could affect U.S. recovery.

The dollar was down against the yen, with USD/JPY down 0.46% at 108.39, and down against the Swiss franc, with USD/CHF down 0.21% at 0.9540.

The greenback was up against the pound, with GBP/USD down 0.25% at 1.6144.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.09% at 1.1155, AUD/USD up 0.80% at 0.8803 and NZD/USD up 1.47% at 0.7900.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.33% at 85.72.

On Friday, expect markets to track the U.S. jobs report.

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