Dollar Trading At A 3-Week Low Versus Euro

The dollar has weakened against its major rivals on Thursday. The weaker than expected Eurozone economic confidence report helped the U.S. currency rebound a bit from a 3-week low versus the Euro. Economists were disappointed by the U.S. weekly jobless claims report, which showed only a small dip in claims. The greenback has also weakened against the Yen, ahead of Friday's Bank of Japan meeting.

The Federal Open Market Committee decided to keep its benchmark rate at effectively zero on Wednesday, which was in line with economist expectations. The Fed did not budge from its conditional pledge to keep rates at historic lows until late 2014. The FOMC once again refrained from a third round of quantitative easing.

The U.S. economy continues to expand at a moderate pace despite the "temporary" impact of higher energy prices, the Federal Reserve announced in making its latest decision on interest rates Wednesday. There were no major shifts in the Fed's accommodative monetary policy, despite a slightly more downbeat assessment of the economic recovery.

The greenback fell to a 3-week low of $1.3262 versus the Euro early Thursday, but has bounced back slightly to around $1.3235.
Eurozone economic confidence declined notably in April, wiping out the gains logged in the first quarter. The weakness in both economic and business sentiment hurt recovery hopes.

Economic confidence fell more than expected to 92.8 from a revised 94.5 in March, survey results from the European Commission showed Thursday. Economists had forecast the reading to drop to 94.2.

 The dollar slipped to over an 8-month low of $1.6206 versus the pound sterling early Thursday, but has since inched back to around $1.6190.
Confidence among British consumers climbed to its highest level in nine months in March as households turned less concerned about the economy and employment prospects, a survey by Nationwide Building Society showed Thursday. The consumer confidence index rose to 53 in March, the highest since June 2011, from 44 in February. Economists had forecast a slight fall to 43.

The buck weakened to Y80.656 versus the Japanese Yen on Thursday, its lowest level since April 17th. Yesterday the dollar was trading around Y81.50.
Japanese all industry activity declined for a second consecutive month in February amid a contraction in production, data from the Ministry of Economy, Trade and Industry showed Thursday. The all industry activity index dropped 0.1 percent month-on-month in February, following a 1 percent decline in January and 1.7 percent gain in December. The pace of decline, however, was slower than the 0.2 percent drop expected.


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