Dollar Slides Versus Euro As ECB Signals Rate Hike
The dollar was mostly weaker on Thursday, gaining on the safe haven Swiss franc but coming under heavy pressure versus some major rivals amid easing fears about the European sovereign debt crisis.
The euro was the day’s big winner as Greece moved closer to a bailout and European Central Bank President Jean-Claude Trichet signaled an interest rate hike next week.
In economic news from the U.S., 428,000 people filed new claims for unemployment benefits, a slight tick down from the previous week’s unrevised figure of 429,000.
The dollar dropped to C$0.9630 versus its Canadian counterpart, a far cry from this week’s highs near C$0.99.
Gradual losses took the dollar to $1.4530 versus the euro, down sharply from where it began the week, at $1.41.
On the other hand,the dollar gained on the Swiss franc, rising to CHF 0.84 from a record low of 0.8274.
Chicago-area business activity unexpectedly expanded at an accelerated pace in the month of June, according to a report released by the Institute for Supply Management – Chicago on Thursday, with the index of activity rebounding after falling in three consecutive months.
The ISM – Chicago said its business barometer jumped to 61.1 in June from 56.6 in May, with a reading above 50 indicating an increase in business activity. The increase surprised economists, who had expected the index to drop to a reading of 53.0.
Across the Atlantic, European Central Bank President Jean-Claude Trichet continued to profess strong vigilance on inflation, strongly hinting that the ECB will hike interest rates next week.
Inflation in the eurozone was steady at 2.7 percent in June, above the ECB’s 2 percent target levels, according to official figures released this morning.
