Investing.com – The dollar rose against a basket of major currencies on Thursday, benefit from a sharp fall in the euro after the European Central Bank President Mario Draghi hinted that the Central Bank’s bond-buying could the program be extended beyond September 2018.
The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, increased by 0,89% to 94.36, which is based on a more-than-three-month high.
The European Central Bank announced their intention to rein in monetary stimulus, reducing its monthly purchases of bonds up to€ 30 billion, while the expansion of its bond-buying program for a period of nine months until September 2018.
The reduction in the volume of bond purchases was widely expected, but investors were surprised by some quiet comments from ECB President Mario Draghi.
Draghi that the Central Bank’s bond-buying program is «open-ended», dashing investor expectations that the beginning of the quantitative would attract to consider the customs of the Central Bank closer to an end-date for its massive bond-buying program.
“The decision today is for an open-ended program … it will not stop suddenly. The large majority of the ECB governing Council expressed a preference for keeping it open,» Draghi said at the press conference.
EUR/USD fell to a three-week low of $1.1691, down 1.02%, while the EUR/GBP 0.48% fell to 0.8867.
The jump in the euro helped the dollar rise to a more-than-three-month high amid the release of mixed economic data.
Weakness in residential construction continued, while the National Association of Realtors’ pending home sales was flat in September, missing expectation of 0.2% rise.
The U.S. labor Department reported Thursday that initial claims increased aid to the unemployed by 10,000 to a seasonally adjusted 233,000 for the week ended Oct. 21, beating the forecasts of a 12,000 increase.
GBP/USD rose 0.67% to $1.3175, while USD/JPY fell 0.02% to Y113.73.
USD/CAD rose by 0.40% to C$1.2846 in the midst of the continued weakness in the loonie following the Bank of Canada to keep the decision interest rates unchanged on Wednesday.