The dollar slumped broadly Thursday, even after a better-than-expected reading of U.S. weekly jobless claims, as investors continued the drumbeat proclaiming that another round of Federal Reserve stimulus could be right around the corner.
The dollar fell to a 15-year low against the yen and an all-time low against the Swiss franc. The euro rose above $1.40 for the first time since February, while the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, fell to its lowest level since January.
The Australian dollar took advantage of broad greenback weakness and a much better-than-expected Australian jobs report, shooting to its highest level since the currency was floated in 1983, more than 1.3% higher against the greenback and above the US$0.99 mark, leading some analysts to point to possible parity.
Thursday morning, the euro was at $1.4001 from $1.3929 late Wednesday, according to EBS via CQG. The common currency rose as high as $1.4030. The dollar was at Y82.30 from Y82.96, after falling as low as Y82.11, while the euro was at Y115.21 from Y115.55. The U.K. pound was at $1.5977 from $1.5885. The dollar was at CHF0.9616 from CHF0.9618.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.026 from 77.435, trading at a new low since January.
While investors continue to speculate a Fed stimulus program is imminent, the European Central Bank's president, Jean-Claude Trichet, on the other hand articulated a steady-on approach to monetary policy at its Thursday press conference after having earlier left key rates unchanged. This contrast--the ECB on the path to eventual policy normalization, with the Fed possibly near to policy loosening--propelled the euro above $1.40.
The dollar fell to a new all-time low against the Swiss franc, dropping as low as CHF0.9555, while the greenback also declined against the yen, dropping to a fresh 15-year low, at Y82.11, and keeping investors on alert for signs of Japan in the market to prop the dollar and stem yen strength.
Hidetoshi Yanagihara, currency strategist at Mizuho Corporate Bank in New York, said there were no signs of Japan in the market to stem yen strength as of Thursday morning North American trading.
Investors still think Japan's yen-selling intervention is possible, but they said the risk is decreasing for now because a meeting of financial ministers and central bankers from the Group of Seven industrialized nations will be held this weekend. Japanese intervention just before the meeting would raise difficult questions for Japanese authorities in trying to explain that they are not just pushing the yen lower to gain a trade advantage against other nations.
The Bank of England also left its monetary policy unchanged Thursday, though speculation mounted whether the bank's Monetary Policy Committee would eventually enact another round of its own stimulus--asset purchases dubbed quantitative easing--which would likely weigh on the pound. Still, sterling gained more than 0.3% on the dollar, participating in the broadside against the greenback.
Canada Morning
The Canadian dollar was left out of the rally, falling against the greenback while its other growth-linked and commodity cousins were rising.
Investors briefly sold off the Canadian dollar in reaction to the release of far-worse-than-expected Canadian building permits data.
The U.S. dollar rose to C$1.0134 after the data, and then ticked back down to C$1.0110. It was at C$1.0104 late Wednesday, according to CQG.
Canadian building permits fell 9.2% In August from July, far exceeding the 2% drop that the market was expecting. The data took some wind out of the Canadian currency's sails, put there by U.S. dollar weakness and stronger oil prices.
'Canadian dollar is going to be hovering and range-bound waiting for the employment data [Friday] in Canada and the U.S.,' said Dave Bradley, director of foreign exchange at Scotia Capital.
The dollar fell to a 15-year low against the yen and an all-time low against the Swiss franc. The euro rose above $1.40 for the first time since February, while the ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, fell to its lowest level since January.
The Australian dollar took advantage of broad greenback weakness and a much better-than-expected Australian jobs report, shooting to its highest level since the currency was floated in 1983, more than 1.3% higher against the greenback and above the US$0.99 mark, leading some analysts to point to possible parity.
Thursday morning, the euro was at $1.4001 from $1.3929 late Wednesday, according to EBS via CQG. The common currency rose as high as $1.4030. The dollar was at Y82.30 from Y82.96, after falling as low as Y82.11, while the euro was at Y115.21 from Y115.55. The U.K. pound was at $1.5977 from $1.5885. The dollar was at CHF0.9616 from CHF0.9618.
The ICE Dollar Index, which tracks the greenback against a trade-weighted basket of currencies, was at 77.026 from 77.435, trading at a new low since January.
While investors continue to speculate a Fed stimulus program is imminent, the European Central Bank's president, Jean-Claude Trichet, on the other hand articulated a steady-on approach to monetary policy at its Thursday press conference after having earlier left key rates unchanged. This contrast--the ECB on the path to eventual policy normalization, with the Fed possibly near to policy loosening--propelled the euro above $1.40.
The dollar fell to a new all-time low against the Swiss franc, dropping as low as CHF0.9555, while the greenback also declined against the yen, dropping to a fresh 15-year low, at Y82.11, and keeping investors on alert for signs of Japan in the market to prop the dollar and stem yen strength.
Hidetoshi Yanagihara, currency strategist at Mizuho Corporate Bank in New York, said there were no signs of Japan in the market to stem yen strength as of Thursday morning North American trading.
Investors still think Japan's yen-selling intervention is possible, but they said the risk is decreasing for now because a meeting of financial ministers and central bankers from the Group of Seven industrialized nations will be held this weekend. Japanese intervention just before the meeting would raise difficult questions for Japanese authorities in trying to explain that they are not just pushing the yen lower to gain a trade advantage against other nations.
The Bank of England also left its monetary policy unchanged Thursday, though speculation mounted whether the bank's Monetary Policy Committee would eventually enact another round of its own stimulus--asset purchases dubbed quantitative easing--which would likely weigh on the pound. Still, sterling gained more than 0.3% on the dollar, participating in the broadside against the greenback.
Canada Morning
The Canadian dollar was left out of the rally, falling against the greenback while its other growth-linked and commodity cousins were rising.
Investors briefly sold off the Canadian dollar in reaction to the release of far-worse-than-expected Canadian building permits data.
The U.S. dollar rose to C$1.0134 after the data, and then ticked back down to C$1.0110. It was at C$1.0104 late Wednesday, according to CQG.
Canadian building permits fell 9.2% In August from July, far exceeding the 2% drop that the market was expecting. The data took some wind out of the Canadian currency's sails, put there by U.S. dollar weakness and stronger oil prices.
'Canadian dollar is going to be hovering and range-bound waiting for the employment data [Friday] in Canada and the U.S.,' said Dave Bradley, director of foreign exchange at Scotia Capital.