The U.S. dollar was broadly lower against its major counterparts on Thursday, after the European Central Bank announced that it was launching a coordinated action to offset liquidity shortages at European banks and following the release of a slew of broadly worse-than-expected U.S. data.
During U.S. morning trade, the greenback was lower against the euro, with EUR/USD advancing 0.77% to hit 1.3859.
The ECB announced that it “has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three U.S. dollar liquidity-providing operations with a maturity of approximately three months covering the end of the year.”
The announcement eased concerns over funding shortages among European lenders, who have been finding it difficult to borrow dollars as a result of the region’s debt crisis and have had to depend more heavily on the ECB for loans.
The greenback was also lower against the pound, with GBP/USD adding 0.40% to hit 1.5832.
Earlier Thursday, official data showed that retail sales in the U.K. declined in line with expectations in August, slipping 0.2%.
Meanwhile, the greenback was higher against the yen but was down sharply against the Swiss franc, with USD/JPY easing up 0.14% to hit 76.73 and USD/CHF tumbling 0.78% to hit 0.8692.
The Swiss National Bank left its benchmark interest rate unchanged at zero for September earlier in the day and reiterated its commitment to defend the minimum exchange rate of 1.20 per euro” with utmost determination.”
The greenback was also lower against its Canadian, Australian and New Zealand cousins, with USD/CAD shedding 0.28% to hit 0.9866, AUD/USD inching up 0.04% to hit 1.0286 and NZD/USD easing up 0.08% to hit 0.8239.
Earlier in the day, the Reserve Bank of New Zealand left its benchmark interest rate unchanged at 2.5% and indicated that rates are likely remain on hold in the coming months, amid risks that the global recovery could slow “sharply.”
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.55% to hit 76.96.
The U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits rose by 11,000 to a seasonally adjusted 428,000 last week, confounding expectations for a decline to 410,000.
Meanwhile, government data showed that U.S. core consumer price inflation rose in line with expectations August, rising 0.02%, while consumer prices including food and energy costs rose 0.4%, above expectations for a 0.2% gain.
Also Thursday, official data showed that manufacturing activity in the Philadelphia region improved less-than-expected in September, remaining in negative territory for the second consecutive month, while an index of manufacturing conditions in New York fell unexpectedly.
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