The U.S. dollar traded weak against major rivals on Thursday with investors reacting to data showing a significant drop in U.S. GDP growth in the third quarter, and digesting the European Central Bank's policy statement.
Traders also reacted to policy announcements from the Bank of Canada and the Bank of Japan.
A report from the Commerce Department showed a dramatic slowdown in the pace of U.S. economic growth in the third quarter. The report said real gross domestic product increased by 2% in the third quarter after jumping by 6.7% in the second quarter. Economists had expected the pace of GDP growth to slow to 2.7%.
Data from the Labor Department showed initial jobless claims decreased for the fourth straight week in the week ended October 23rd, dipping to 281,000, a decrease of 10,000 from the previous week's revised level 291,000.
Meanwhile, pending home sales in the U.S. showed a notable pullback in the month of September after spiking in August, according to a report released by the National Association of Realtors on Thursday.
NAR said its pending home sales slumped by 2.3% to 116.7 in September after surging 8.1% to 119.4 in August. Economists had expected pending home sales to come in unchanged.
The dollar index, which dropped to 93.28 earlier in the session, is currently at 93.37, down nearly 0.5% from the previous close.
Against the Euro, the dollar has weakened to 1.1684, from 1.1603. The European Central Bank left its key interest rates and its forward guidance on asset purchases unchanged, in line with expectations, amid concerns over high inflation.
Policymakers expect key interest rates to "remain at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon," the bank reiterated.
The Pound Sterling has firmed to $1.3797, gaining more than 0.4%.
The Yen is firmer by about 0.2% at 113.58 a dollar. The Bank of Japan today maintained its massive monetary stimulus and downgraded its real GDP growth and consumer inflation forecasts.
Against the Aussie, the dollar is at 0.7544, after having settled at 0.7518 on Wednesday.
The Swiss franc has firmed to 0.9121 a dollar from 0.9181, while the Loonie has strengthened to 1.2343 a dollar from 1.2361. On Wednesday, the Bank of Canada terminated its quantitative easing earlier than expected and suggested the possibility of a rate hike in the middle quarters of 2022.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2184777/
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