2023.03.1621:08:00UTC+00Dollar Loses Ground Against Major Counterparts

The U.S. dollar was weak against its major counterparts on Thursday with traders reacting to the European Central Bank's interest rate decision, and looking ahead to the Federal Reserve's policy meeting next week.

The ECB today hiked interest rates by 50 basis points, in line with its guidance in February, as it expects inflation to remain high for too long. The bank also said policymakers were closely monitoring the financial market turmoil triggered by the banking sector crisis in the US and Switzerland.

ECB assured that its toolkit is fully equipped to ensure sufficient liquidity support to the euro area financial system when needed.

In U.S. economic news, data released by the Labor Department showed initial jobless claims fell to 192,000 last week, a decrease of 20,000 from the previous week's revised level of 212,000. Economists had expected jobless claims to slip to 205,000 from the 211,000 originally reported for the previous week.

A separate report released by the Labor Department showed import prices dipped by 0.1% in February after falling by a revised 0.4% in January. Economists had expected import prices to slip by 0.2%, matching the decrease originally reported for the previous month.

The report also said import prices in February were down by 1.1% compared to the same month a year ago, reflecting the first annual decrease since December 2020.

The dollar index, which dropped to 104.20 in the Asian session, briefly emerged above the flat line to 104.74 in early New York session, but dropped to 104.43 subsequently.

Against the Euro, the dollar is trading at 1.0616, down from the previous close of 1.0578.

The dollar is trading at 1.2113 against Pound Sterling, dropping from 1.2057.

Against the Japanese currency, the dollar recovered to 133.75 after having weakened to 131.72 earlier. The dollar had settled at 133.43 yen on Wednesday.

The dollar is down at 0.6655 against the Aussie. Against Swiss franc, the dollar weakened to CHF 0.9293 from CHF 0.9335.

The dollar is weak against the Loonie at C$ 1.3722, sliding from C$ 1.3769, after crude oil prices climbed higher.