Dollar index hits fresh multi-year highs after ECB stimulus news

Investing.com –

Investing.com – The dollar climbed to fresh 12-year highs against the other major currencies on Thursday, after the release of relatively positive U.S. jobless claims data and as the European Central Bank announced a large scale quantitative easing program.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending January 17 decreased by 10,000 to 307,000 from the previous week’s total of 317,000.

Analysts had expected initial jobless claims to decline by 17,000 to 300,000 last week.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, advanced -% to a fresh 12-year peak of -.

EUR/USD tumbled 1.41% to 1.1447 after ECB President Mario Draghi said it will make monthly purchases of €60 billion per month, starting in March and continuing until late 2016.

Draghi acknowledged the action the ECB took last year was “insufficient” to ward off the threat of deflation in the region. The annual rate of inflation in the euro area fell into negative territory last month, dropping 0.2%.

Draghi said the risks to the euro area recovery remain to the “downside” but added that today’s action should bolster the outlook. He noted that lower oil prices should help households and support a wider recovery.

The pound slid lower against the dollar, with GBP/USD down 0.28% to 1.5102.

The Confederation of British Industry reported on Thursday that its index of industrial orders expectations fell to 4 this month from a reading of 5 in December. Analysts had expected the index to remain unchanged in January.

Separately, the Office for National Statistics said that U.K. public sector net borrowing rose to by £12.47 billion last month from a revised £11.73 billion in November, whose figure was revised from a previously estimated £13.41 billion.

Analysts had expected public sector net borrowing to decline to £9.7 billion in December.

Elsewhere, USD/JPY shed 0.24% to 117.70, while USD/CHF rallied 1.05% to 0.8688.

The commodity-linked currencies were mixed. AUD/USD rose 0.26% to 0.8107. Data earlier showed that Australia’s new home sales rose 2.2% in November, after an increase of 3.0% the previous month.

In addition, the Melbourne Institute reported that its inflation expectations for the next 12 months in Australia ticked down to 3.2% in December from 3.4% in November.

NZD/USD eased 0.11% to 0.7544, hovering close to two-and-a-half year lows of 0.7514 hit earlier in the session, while USD/CAD inched down 0.08% to 1.2331, not far from Wednesday’s nearly six-year highs of 1.2395.

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