Investing.com - The dollar pulled away from more than four-year highs against a basket of other major currencies on Thursday, as comments by European Central Bank President Mario Draghi boosted demand for riskier assets.
EUR/USD jumped 0.95% to 1.2428, off two-year lows of 1.2281 hit overnight.
The single currency was boosted after ECB President Mario Draghi indicated that it would not embark on quantitative easing for now, saying the bank would reassess its stimulus program in the first quarter of 2015.
Draghi said the bank could potentially change the size, scale and composition of its existing stimulus programs. The governing council remains unanimous that it will take further measures, if necessary, he added.
The ECB substantially revised down its forecasts for growth and inflation and warned that the latest forecasts do not take into account the recent steep drop in oil prices.
Earlier Thursday, the bank left euro zone interest rates on hold at their current record lows of 0.05% earlier Thursday, in a widely anticipated decision.
In the U.S., the Department of Labor said the number of individuals filing for initial jobless benefits in the week ending November 29 decreased by 17,000 to 297,000 from the previous week’s revised total of 314,000.
USD/JPY touched seven-year highs of 120.25, the most since July 2007 before falling back to 119.80, steady for the day.
The yen weakened after Japanese media outlets reported that Prime Minister Shinzo Abe's coalition government could retain its majority in the lower house of parliament in elections due to be held on December 14.
Abe dissolved parliament earlier this month, clearing the way for elections to seek a fresh mandate for his economic policies, which call for a weaker yen. The decision came after Japan’s economy unexpectedly fell into recession in the third quarter.
The yen has been under pressure since the Bank of Japan unexpectedly expanded its stimulus program in late October. In contrast, the Federal Reserve wound up its asset purchase program in October and is expected to start raising interest rates around September 2015.
The pound was little changed, with GBP/USD at 1.5695 after the Bank of England's monetary policy committee left U.K. interest rates on hold at their current record low of 0.5% and maintained the size of its asset purchase program at £375 billion.
USD/CHF tumbled 0.99% to trade at 0.9679.
The Australian dollar fell to fresh four-year lows, with AUD/USD down 0.18% to 0.8388.
Official data earlier showed that Australian retail sales rose 0.4% in October, more than the expected 0.1% gain, while a separate report showed that Australia's trade deficit narrowed to A$1.132 billion in October from a revised A$2.23 billion in September.
Elsewhere, NZD/USD rose 0.30% to 0.7785 and USD/CAD added 0.11% to 1.1381 after Canada's Richard Ivey School of Business said its purchasing managers’ index rose to 56.9 last month from a reading of 51.2 in October. Analysts had expected the index to inch up to 53.2 in November.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, slid 0.62% to 88.44, down from a more than four-year high of 89.19 hit earlier in the session.