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Forex - Dollar lower vs. rivals, Franc plunges on peg speculation

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Forexpros - The U.S. dollar was lower against most of its major counterparts on Thursday, after a report showing U.S. jobless claims fell to a four-month low last week boosted sentiment, while Swiss franc plunged amid speculation the SNB might link the franc to the euro.

During U.S. morning trade, the greenback was down against the euro, with EUR/USD gaining 0.65% to hit 1.4271.

Bank of France Governor Christian Noyer said earlier that the financial state of French banks is sound, despite rumors that are unfounded.

The recent market turmoil "doesn't affect the financial solidity of French banks and the capacity to resist that they have demonstrated since the start of the crisis," Noyer said.

The greenback was also lower against the pound, with GBP/USD climbing 0.49% to hit 1.6213.

U.K. Chancellor of the Exchequer George Osborne said earlier that U.K. lenders held enough capital and liquidity to whether the recent turmoil in financial markets.

The chancellor added that the break up of the euro would be "economically disastrous" for the countries involved and for the U.K.

Meanwhile, the greenback edged lower against the yen, with USD/JPY easing down 0.07% to hit 76.80. The dollar spiked higher against the yen earlier before falling back, sparking speculation that the Bank of Japan stepped in to curb the yen's recent sharp gains.

However, an official from the country's Ministry of Finance declined to comment on the sudden movement in the pair and whether the government was intervening in the market.

Elsewhere, the greenback extended sharp gains against the Swiss franc, with USD/CHF soaring 4.7% to hit 0.7607, after comments from Swiss National Bank Vice President Thomas Jordan fuelled speculation the central bank would introduce further measures to weaken the currency.

Meanwhile, the greenback was lower against the risk-sensitive Canadian, Australian and New Zealand dollars, with USD/CAD falling 0.61% to hit 0.9889, AUD/USD jumping 0.78% to hit 1.0258 and NZD/USD gaining 0.91% to hit 0.8186.

Statistics Canada said earlier that Canada' trade deficit widened unexpectedly to CAD1.6 billion in June, after posting a deficit of CAD1.0 billion in May, whose figure was revised up from a deficit of CAD0.8 billion.

Also Thursday, Australia's Bureau of Statistics said that the country's unemployment rate rose unexpectedly to 5.1% in July from 4.9% in June, the first increase since October.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.19% to hit 74.71.

The U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending August 5 fell by 7,000 to a seasonally adjusted 395,000, outstripping expectations for a decline to 401,000.

It was the lowest level since mid-April, helping to ease concerns over the U.S. economic outlook.

A separate report showed that the U.S. trade deficit widened unexpectedly to USD53.1 billion in June, the largest deficit in almost three years.

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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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