The greenback fell broadly versus major currencies after a report showed manufacturing in the Philadelphia region contracted this month, adding speculation the U.S. is headed for a recession.
The Philadelphia Federal Reserve Bank's general economic index fell to minus 24 (forecast was minus 11.0), the lowest since September 1990, from minus 20.9 the prior month. Negative readings signal contraction. Interest-rate futures showed a 92% chance the central bank will lower its target by 0.5% to 2.5% on March 18.
The implied rate on the June Euribor interest-rate futures contract rose to 4.085% on Thursday, from 4.03% yesterday, suggesting the European Central Bank will keep interest rates on hold at 4%. The single currency rose strongly from 1.4702 to 1.4838 against the greenback on dollar’s broad-based weakness due to the weak U.S. economic data. The greenback tumbled versus the Swiss franc from 1.1034 to 1.0966 on risk aversions. Eur/chf fell sharply from 1.6231 to 1.6118.
The British pound rallied from 1.9410 to 1.9643, the most in a month, after a report showed U.K. retail sales climbed more than double the pace forecast. U.K. stores sales increased 0.8% in January, much higher than the expectation of a rise of 0.1% and upwardly revised 0.2% decrease in December.
Commodity currencies, including Australian dollar and New Zealand dollar maintained a firm undertone and rose to 0.9209 and 0.8018 respectively as Gold hit historic high of 953.80 while silver hit a 27-year high of 18.04, extending their recent rallies.
Friday will see the release of eurozone manufacturing and service PMI and industrial orders.