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Dollar remains broadly lower despite upbeat U.S. data

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Investing.com -

Investing.com - The dollar remained near three-week lows against a basket of other major currencies on Thursday, despite upbeat U.S. data as demand for the greenback remained under pressure after the Federal Reserve said interest rates would remain low for some time.

In a report, the Federal Reserve Bank of Philadelphia said that its manufacturing index rose to an eight-month high of 17.8 this month from May's reading of 15.4. Analysts had expected the index to dip to 14.0 in June.

The data came after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 14 declined by 6,000 to 312,000 from the previous week's revised total of 318,000. Analysts had expected jobless claims to fall by 4,000 to 314,000 last week.

But the dollar remained under pressure after the Fed gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed's forecast of where interest rates might reach in the long term fell from 4% to 3.75%.

The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.

The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.

USD/JPY eased 0.09% to 101.82, off the one-week high of 102.14 reached Wednesday ahead of the Fed announcement.

GBP/USD touched highs of 1.7063, the most since August 2009, and was last at 1.7058. Sterling shrugged off data showing that U.K. retail sales fell in May, declining for the first time since January.

U.K. retail sales decreased by 0.5% last month, in line with forecasts, official data showed, and were 3.9% higher on a year-over-year basis. The data did little to alter expectations that the Bank of England will raise interest rates sooner than other central banks.

EUR/USD was up 0.29% to 1.3634.

Elsewhere, USD/CHF lost 0.49% to trade at 0.8914. The Swiss National Bank kept its benchmark interest rate unchanged close to zero on Thursday and reaffirmed its commitment to the minimum exchange rate of CHF1.20 per euro.

The accompanying rate statement released after the announcement said that the Swiss franc is "still high."

The SNB also said it would continue to enforce the minimum exchange rate of 1.20 per euro imposed in September 2011, and reiterated that it is prepared to purchase foreign currency in "unlimited quantities" if necessary.

AUD/USD eased 0.07% to 0.9413, while NZD/USD was down 0.06% to 0.8728 and USD/CAD slipped 0.11% to 1.0826.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.24% to 80.26, not far from lows of 80.24, the weakest level since May 27.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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