NEW YORK (MarketWatch) — The ICE U.S. Dollar Index rose for the seventh-consecutive session Friday, boosted by rising crude-oil prices, a strong performance by U.S. stocks and the expectation that the European Central Bank will soon expand its program of asset purchases.
The euro extended more than a week of declines Thursday, falling to another nine-year low, after the European Union Commission’s report on eurozone economic sentiment showed no change from a weak reading in November.
The dollar index, a measure of the dollar’s strength against a trade-weighted basket of six currencies, the heaviest of which is the euro, DXY, +0.00% was up 0.48% to 92.3300 Thursday.
ECB President Mario Draghi reiterated Thursday in a letter that the central bank is ready to begin purchasing eurozone government bonds, considered the final step toward “full-blown” quantitative easing.
Some analysts have said that the ECB could launch these purchases at its Jan. 22 meeting.
The shared currency EURUSD, -0.01% fell to $ 1.175, its lowest since late 2005, around 8 a.m. Eastern time. It was valued at $ 1.179 in recent trade, down from $ 1.183 late Wednesday.
German manufacturing orders fell sharply in November. The weak reading comes a day after a Eurostat report showed that falling consumer prices sent the eurozone inflation into negative territory in December, fueling fears that the region could face a prolonged period of deflation. Read: Deflation in the eurozone? Not so fast
Angus Campbell, senior analyst at FxPro said in a note that the latest reading on consumer prices “put a swift end to a meager attempt by EURUSD to rebound.”
Wednesday’s Federal Open Market Committee minutes showed the Federal Reserve’s monetary-policy makers don’t need to wait for inflation to rise before hiking interest rates, which helped the dollar rise against its G-4 rivals.
However, the minutes did reveal that the central bank won’t begin raising rates for “at least the next couple of meetings.”
The buck also got a boost from the Labor Department, which said U.S. jobless claims fell by 4,000 last week.
“Last night’s FOMC minutes for all intents and purposes were seen as relatively hawkish with encouraging comments on growth,” Campbell said.
The dollar traded at USDJPY, +0.10% was at ¥119.63, compared with ¥119.16 late Wednesday in New York.
After hitting an 18-month low of around $ 1.503 earlier in the session, the pound GBPUSD, -0.02% recovered against the dollar, but remained slightly lower for the session, after the Bank of England left its benchmark interest rate at 0.5% and left its bond-buying stimulus program unchanged. The pound traded at $ 1.51 in recent trade.
After reaching its highest level against the krone USDNOK, -0.05% since 2003 on Wednesday, the dollar surrendered some of its gains as crude oil futures traded on Nymex closed higher for a second straight session. One dollar was worth 7.63 krone in recent trade, compared with 7.70 Wednesday afternoon.