The dollar is seeing continued weakness against other major currencies on Thursday in New York. The buck retreated against euro as the European Central Bank cut interest rates, but by less than expected. Meanwhile, the greenback continued to cede ground against the pound with credit surveys in the U.K. showing increased availability of lendable funds. Against the yen, the dollar made another run at the 100 mark in the earl morning hours, but backed off again and has experienced choppy trading since.
On the U.S. economic front, traders largely shrugged off the Labor Department's disappointing employment figures for the previous week, while focusing on new orders for manufactured goods, which increased by more than expected in the month of February.
The dollar continued to lose ground against the euro, with the move sharpening in the late morning. The greenback hit a six-day low of 1.3492 compared to midnight's level of 1.3241. The move has rocked the dollar which showed signs of stabilizing in the past two day after moving off Monday's two-week high.
The euro strengthened the Governing Council of the ECB reduced the bank's key interest rate, which is the interest rate on the main refinancing operations, by a quarter percentage point. The reduction took the benchmark rate to an all-time low of 1.25 percent. Economists had expected the ECB to lower the rate by a half point.
In comments following the bank's decision to cut its benchmark interest rate by a quarter percentage point, ECB President Jean-Claude Trichet signaled that there is still room to cut the benchmark interest rate for Eurozone and said the world economy is undergoing a severe downturn.
Meanwhile, the dollar is continuing its losing streak against the sterling in the late morning hours. After the dollar posted a two-week high of 1.4144 Monday, the greenback has given back almost all of the previous week's gains in the last few days. The pound continued to move up versus the greenback, posting a level of 1.4726 in late morning compared to midnight's level of 1.4468. With the pound's resurgence, the dollar is poised to challenge last week's six-week low of 1.4777.
The Bank of England's latest Credit Conditions Survey said lenders reported slight increase in corporate credit availability in the last quarter, in contrast to a small drop expected in the fourth quarter. Lenders anticipate further increase over the coming three months.
Meanwhile, against the yen, the dollar has made another run at the 100 mark earlier in the morning, but has backed off yet again. Moving into the early afternoon hours, the buck is sitting at 99.36 after reaching a multi-month high of 99.90 earlier. The benchmark figure of 100 has been challenged in recent trading as forward looking news from Japan has put the currency under considerable pressure. The last time the dollar topped 100 was Nov. 3.
The monetary base in Japan was up 6.9 percent on-year in March to JPY 94.46 trillion, the Bank of Japan said. That's up from JPY 93.65 trillion yen in February, which saw a 6.4 percent annual increase.
U.S. economic data showed that initial jobless claims rose to 669,000 for the week ended March 28, up from the previous week's revised figure of 657,000. Economists had expected jobless claims to edge down to 650,000 from the 652,000 originally reported for the previous week.
Meanwhile, manufacturing data showed that factory orders rose 1.8 percent in February following a revised 3.5 percent decrease in January. Economists had been expecting orders to rise by 1.5 percent compared to the 1.9 percent decrease originally reported for the previous month.
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