Euro slips, dollar soars higher in see-saw trade
- ECB pledges to keep rates low for longer
- Euro is agitated after ECB decision
- Unemployment claims in the United States lower than expected
- Higher risk currency business
- Dollar and yen above recent highs
NEW YORK, July 22 (Reuters) – The dollar rose against a basket of currencies in choppy trading on Thursday as the euro fell as risk appetite eased again with volatile stocks and investors buying US Treasuries.
Earlier in the session, the greenback slipped on weaker than expected US jobless claims data that raised concerns about the recovery of the world’s largest economy from the pandemic.
The euro, on the other hand, was firmer earlier in the day after the European Central Bank met expectations by pledging to keep interest rates at record highs for even longer.
ECB President Christine Lagarde, in her press briefing, said nothing to change the cautious outlook for the market in the euro zone. She said a new wave of the coronavirus pandemic could pose a risk to the region’s recovery, although it offered a more balanced economic outlook.
“The 30 point euro / dollar hike at Christine Lagarde’s press conference seemed appropriate in light of some of the dovish speeches leading up to the meeting, but the market has now abandoned that decision and is coming back. at its starting point this morning, “said Erik Bregar, head of foreign exchange strategy at the Exchange Bank of Canada in Toronto.
The accommodating pivot of the ECB – which follows its recent review of strategy – at a time when many peers are considering exiting the stimulus from the pandemic era is expected to keep the single European currency under pressure.
As of early afternoon, the euro was down 0.2% against the dollar at $ 1.1763. On Wednesday, it hit a 3.5-month low at $ 1.1752.
The dollar index, meanwhile, rose 0.1% to 92.87, as the impact of weaker-than-expected US jobless claims data waned.
Data showed that initial claims for state unemployment benefits rose from 51,000 to seasonally adjusted 419,000 for the week ended July 17, the highest level since mid-May. Economists polled by Reuters had forecast 350,000 candidates for last week. Read more
“These numbers provide further evidence of deceleration,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.
“Continuing to print above expectations, weekly statements suggest a loss of momentum in the US labor market – something that could push Federal Reserve tightening plans further into the future and put additional pressure on on bond yields, ”he added.
Elsewhere, growth-oriented currencies, such as the Australian dollar, appreciated as global risk sales eased further. The Australian dollar last climbed 0.2% to US $ 0.7372.
The gains in higher-risk assets come after robust corporate earnings surged on Wall Street and European stock exchanges, leaving investors free to worry that the Delta Covid-19 variant could hold back the economic recovery.
The British pound rallied 0.2% to $ 1.3768, recovering from 5 to 1/2 month lows, while in cryptocurrencies bitcoin rose after the 7.9% jump Wednesday – the most important since mid-June. It last rose 0.9% to $ 32,448.
The dollar slipped 0.1% against the yen, another safe haven, to 110.14 yen.
Price of currency offers at 1:10 p.m. (5:10 p.m. GMT)
Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Sujata Rao and Tommy Wilkes in London; Editing by Bernadette Baum and Mark Heinrich
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