The U.S. dollar continued to exhibit weakness against major currencies on Thursday, with the latest interest rate cut by the Federal Reserve and speculation about more cuts coming up in the foreseeable future weighing down the currency.
Although the Fed changed its wordings in the accompanying statement and cut down "act as appropriate," it still did not say anything to hint that there won't be further easing.
The dollar index touched a low of 97.22 in morning trades, and despite staging a recovery of sorts to 97.45, edged lower subsequently. It was last seen at 97.33, down notably from previous close of 97.65.
The euro was trading at $1.1152, slightly above previous close, after moving between $1.1132 and $1.1176 earlier.
Against pound sterling, the dollar weakened to 1.2976 before recovering some lost ground. Still, at 1.2945, the currency was down as much as 0.36% from previous close.
The Japanese currency also scored against the dollar, trading at 108.01 a dollar, compared to Wednesday's close of 108.85 yen a dollar.
The Bank of Japan maintained its policy rates on Thursday, but it signaled further monetary easing going forward as the economy is set to expand at a slower pace amid weaker inflation outlook.
The central bank said short and long-term interest rates are expected to remain at their current or lower levels as long as it is necessary to achieve the price stability target.
The BoJ downgraded its inflation and real growth projections. The real growth forecast for fiscal 2019 was cut to 0.6% percent from 0.7% and inflation outlook to 0.7% from 1%. It cut read GDP forecast to 0.7% and the outlook for fiscal 2021 to 1%, from earlier 0.9% and 1.1%, respectively.
The dollar - Swiss franc pair was trading at 0.9867, giving franc near 0.3% gain.
Against the loonie, the dollar was little changed at 1.3166. According to data released by Statistics Canada, the country's GDP grew 0.1% in August 2019, after stalling in the previous month. Economists expected GDP to grow by 0.2% in August.
The Aussie was weak against the dollar, with the pair quoting at 0.6894.
In economic news, the Labor Department's data showed a modest increase in first-time claims for U.S. unemployment benefits in the week ended October 26th.
The report said initial jobless claims rose to 218,000, an increase of 5,000 from the previous week's revised level of 213,000. Economists had expected jobless claims to inch up to 215,000 from the 212,000 originally reported for the previous week.
According to a report from the Commerce Department, personal income and spending in the U.S. both rose in line with economist estimates in the month of September.
The report said personal income increased by 0.3% in September after climbing by an upwardly revised 0.5% in August. Economists had expected personal income to rise by 0.3%.
Meanwhile, personal spending edged up by 0.2%, matching the revised uptick seen in August.
MNI Indicators released a report on Thursday showing the Chicago business barometer tumbled to 43.2 in October from 47.1 in September. Economists had expected the index to inch up to 48.0.
With the unexpected decrease, the Chicago business barometer slumped to its lowest level since December of 2015.
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source http://www.mt5.com/forex_news/quickview/2145693/
