Xinhua
15 Sep 2023, 02:48 GMT+10
NEW YORK, Sept. 14 (Xinhua) -- The U.S. dollar advanced in late trading on Thursday, as the European Central Bank (ECB) announced a 10th consecutive hike in its main interest rate.
The dollar index, which measures the greenback against six major peers, increased 0.58 percent to 105.3816 in late trading, hitting its highest level in six months.
The ECB's rate rises have hauled its main deposit facility from -0.5 percent in June 2022 to a record 4 percent. The ECB move on Thursday also has taken the interest rates on its main refinancing operations and marginal lending facility 25 basis points higher, to 4.5 percent and 4.75 percent, respectively.
In a statement, the ECB indicated that further hikes may be off the table for now. "Based on its current assessment, the Governing Council considers that the key ECB interest rates have reached levels that, maintained for a sufficiently long duration, will make a substantial contribution to the timely return of inflation to the target."
"The Governing Council's future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary," it added.
The euro fell sharply after the announcement. In late New York trading, the euro was down to 1.0636 U.S. dollars from 1.0732 dollars in the previous session, and the British pound was down to 1.2402 U.S. dollars from 1.2486 dollars.
During the week ending Sept. 9, claims for state unemployment benefits rose by 3,000 to 220,000 in the United States, the U.S. Bureau of Labor Statistics (BLS) said Thursday. The four-week moving average of claims fell 5,000 to 224,500 in the latest week, which was the lowest level since late February.
"Layoffs remain low and, for now, there is no sign that businesses are shedding workers in large numbers in response to restrictive monetary policy that is aimed at weakening demand and economic activity," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
Despite the U.S. economic data, views for the Federal Reserve remained largely intact. Expectations that the U.S. central bank will likely hold rates steady at its Sept. 19-20 policy meeting are at 97 percent, according to CME's FedWatch Tool on Thursday.
In late New York trading, the U.S. dollar bought 147.4410 Japanese yen, lower than 147.45 Japanese yen of the previous session. The U.S. dollar increased to 0.8962 Swiss francs from 0.8934 Swiss francs, and it fell to 1.3509 Canadian dollars from 1.3564 Canadian dollars. The U.S. dollar increased to 11.2022 Swedish krona from 11.1379 Swedish krona.
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