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Dollar sharply lower vs. euro after ECB

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Shutterstock photo - The U.S. dollar fell sharply against the euro on Thursday after the European Central Bank said a vote to leave interest rates unchanged was unanimous, but the greenback remained close to two-and-a-half year highs against the yen.

During U.S. morning trade, the greenback hit a more than one-week low against the euro, with EUR/USD rallying 1.15% to 1.3216.

The ECB left interest rates on hold at 0.75% in a widely anticipated decision, but some market participants had expected ECB President Mario Draghi to flag the possibility of rate cuts later this year at the bank's post-policy meeting press conference.

Sentiment on the euro had been buoyed earlier after Spain saw borrowing costs fall sharply at an auction of government debt.

The dollar was hovering close to two-and-a-half year highs against the yen, with USD/JPY up 0.32% to 88.15.

Investors continued to shun the yen amid expectations that Japan's government, led by Prime Minister Shinzo Abe, will pressure the Bank of Japan to implement more aggressive easing measures at its policy meeting later this month as part of an effort to combat deflation.

The greenback was lower against the pound, with GBP/USD up 0.57% to 1.6113.

The Bank of England kept its benchmark interest rate on hold at 0.5% and maintained the size of its asset purchase program at GBP375 billion Thursday, in a widely anticipated decision.

The greenback fell to session lows against the Swiss franc, with USD/CHF dropping 0.97% to 0.9162.

The greenback was weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD sliding 0.16% to 0.9859, AUD/USD gaining 0.58% to trade at 1.0574 and NZD/USD rising 0.38% to 0.8428.

The commodity linked dollars found support earlier in the session after official data showed that China's trade surplus widened unexpectedly in December, adding to signs of a recovery in the world's second largest economy.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.79% to 80.00.

In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week rose to a seasonally adjusted 371,000 from 367,000 the previous week compared to expectations for a decline to 365,000.

Jobless claims for the preceding week were revised down to 367,000 from a previously reported 372,000 the report said. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.

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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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