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Dollar regains ground, euro moves lower

Published 10/31/2013, 07:28 AM
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Investing.com - The dollar recovered against the other major currencies on Thursday after the Federal Reserve was less dovish than expected on the economic outlook, while the euro weakened after downbeat euro zone inflation and employment data.

During European late morning trade, the euro was lower against the dollar, with EUR/USD down 0.55% to 1.3660.

The euro slid after weaker than expected euro zone data on inflation and employment indicated that the recovery in the region remains sluggish.

Eurostat said consumer price inflation in the currency bloc rose 0.7% in October, the slowest pace since November 2009, after rising1.1% in September. Economists had expected the rate of inflation to remain unchanged.

A separate report showed that the euro zone unemployment rate remained unchanged at a record high 12.2% in September, compared to expectations for a decline to 12%.

The dollar steadied after the Fed left its USD85 billion-a-month asset purchase program in place following its monthly policy meeting on Wednesday.

Fed officials stuck to the view that the economy is expanding "at a moderate pace" and said downside risks were diminishing. The bank gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014.

The dollar slipped lower against the yen, with USD/JPY losing 0.31% to trade at 98.20.

The Bank of Japan made no changes to its stimulus program on Thursday and reiterated that inflation will be close to reaching the bank’s 2% target by April 2015.

Elsewhere, the dollar was almost unchanged against the pound, with GBP/USD dipping 0.03% to 1.6035 and rose to session highs against the Swiss franc, with USD/CHF up 0.38% to 0.9027.

The Australian and New Zealand dollars gained ground against the greenback, with AUD/USD rising 0.29% to 0.9511 and NZD/USD climbing 26% to 0.8292.

Earlier Thursday, Reserve Bank of New Zealand Governor Graham Wheeler said the strong domestic dollar gave the central bank "greater flexibility as to the timing and magnitude of future increases in the official cash rate”.

The comments came after the RBNZ left interest rates on hold at 2.5% following its monthly meeting.

The greenback was also lower against the Canadian dollar, with USD/CAD down 0.25% to 1.0452.

The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.31% to 80.02.

The U.S. was to release the weekly government report on initial jobless claims later in the trading day.



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