Dollar gains on U.S. jobless claims report, dovish Draghi comments

Investing.com - Investing.com - A double shot of better-than-expected U.S. jobless claims numbers and dovish comments from European Central Bank President Mario Draghi strengthened the dollar against of its peers on Thursday.

In U.S. trading on Thursday, EUR/USD was down 0.79% at 1.2386.

Draghi said earlier that the ECB would soon begin purchasing asset-backed securities to prop up the economy.

The program will run for two years and have a 'sizeable impact' on the ECB's balance sheet, Draghi said.

He added that the governing council is unanimously committed to taking further 'timely measures' if needed, which sent the euro dropping.

The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets are keeping a close eye out for plans to announce purchases of government debt, known as quantitative easing.

The ECB left rates on hold at record lows at its policy meeting earlier Thursday, as widely expected.

Meanwhile across the Atlantic, the dollar found support after the number of people who filed for unemployment assistance in the U.S. last week fell more than expected, fueling optimism over the strength of the labor market, official data showed on Thursday.

The U.S. Department of Labor reported earlier that the number of individuals filing for initial jobless benefits in the week ending Nov. 1 decreased by 10,000 to 278,000 from the previous week's revised total of 288,000.

Analysts had expected jobless claims to fall by 3,000 to 285,000 last week.

The number of Americans applying for new jobless benefits held below 300,000 for the eighth consecutive week, a sign that recovery in the labor market may be gaining momentum.

Continuing jobless claims in the week ended Oct. 25 fell to 2.348 million from 2.387 million in the preceding week. Analysts had expected continuing claims to decline to 2.360 million.

The four-week moving average came to 279,000, a decline of 2,250 from the previous week's total of 281,250. The monthly average is seen as a more accurate gauge of labor trends because it reduces volatility in the week-to-week data.

The dollar was up against the yen, with USD/JPY up 0.23% at 114.93, and up against the Swiss franc, with USD/CHF up 0.84% at 0.9720.

The greenback was up against the pound, with GBP/USD down 0.85% at 1.5838.

The pound softened after the Bank of England's monetary policy committee voted to leave U.K. interest rates at their current record lows of 0.5%.

The MPC also made no changes to its asset purchase scheme.

The decision came a day after data revealed that the U.K. service sector expanded at the slowest rate in 17 months in October, adding to indications that the rate of the economic recovery is cooling.

While the Bank of England's decision to leave policy unchanged surprised few, lackluster indicators have many investors pushing back expectations as to when the Bank of England may begin hiking benchmark interest rates.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.33% at 1.1424, AUD/USD down 0.27% at 0.8573 and NZD/USD down 0.47% at 0.7694.

The Canadian dollar shrugged off data revealing that the number of new building permits issued in Canada rose 12.7% in September, much better than expectations for a gain of 5.2% after a sharp fall in August.

Lower oil prices largely pushed the currencies downward.

The US dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.69% at 88.14.

On Friday, expect the dollar to track the U.S. October jobs report.

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