The dollar weakened against most its peers today coming off of over 4 year highs as the market’s appetite for risk grew following remarks made by European Central Bank President Draghi with the dollar losing some safe haven demand appeal. The US Department of Labor released data which revealed initial jobless claims for the week ending November 29 dropped by 17,000 from 314,000 which was the amended total for the week prior.
The euro strengthened against the dollar following Draghi’s comments which highlighted there would be no introduction of new stimulus measures for the time being and that the central bank would reassess easing measures in the first quarter of year. All of the ECB’s governing members agree that additional measures will be introduced if required. The central bank could possibly alter the scope of makeup of its current stimulus programs.
The pound was virtually unchanged against the dollar following the Bank of England’s latest policy meeting which resulted in keeping interest rates at 0.5% and the size of its asset purchase program at 375 billion pounds, while the dollar was supported by upbeat US jobless claims data. The pound was weaker against the euro and stronger against the yen.
The yen weakened against the dollar with the pair trading at 7 year highs breaking its 120 handle on the back of news reports which stated that Japanese Prime Minister Abe’s coalition government could maintain its majority following elections set to take place December 14. After Japan’s economy suddenly slid into recession in the 3rd quarter Abe called for a snap election in order to push through his monetary reforms which center around a weaker yen.
The Australian dollar weakened against the dollar with the pair dropping to new 4 year lows following data which revealed that Australian retail sales increased above forecasts by 0.4% in October and as other figures highlighted a decrease in Australia’s trade deficit to AUD 1.132 billion in October. The New Zealand dollar strengthened while the Canadian dollar weakened against the dollar. Richard Ivey School of Business in Canada reported an increase from 51.2 in October to 56.9 in November for its purchasing manager’s index.
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