Euro advances after ECB's Lagarde says exchange rate not being targeted
The euro rose to a one-week high against the dollar on Thursday, after European Central Bank President Christine Lagarde said that while the ECB is watching the exchange rate, it is not a monetary policy tool.
Her comment suggested the ECB was unlikely to undertake measures to weaken the euro despite its recent gains, giving traders motivation to take the single euro zone currency higher.
As expected, the ECB held interest rates steady on Thursday.
The euro rose as high as $1.1917, a one-week peak, and was last up 0.2% at $1.1825. The euro’s high this year is $1.2014, with the currency surging roughly 6% so far this year.
But a strong euro tends to hurt an export-dependent economy like the euro zone, raising concerns from some ECB officials such as chief economist Philip Lane, who said the exchange rate mattered to monetary policy.
In afternoon trading, the dollar index slipped 0.1% to 93.345, after hitting a four-week high the previous session.
The dollar slipped after data showed U.S. initial jobless claims totaled a seasonally adjusted 884,000 for the week ended Sept. 5, matching the number of applications received the prior week. Economists polled by Reuters had forecast 846,000 jobless claims applications.
U.S. producer prices were better than expected though, with gains of 0.3% for the headline and 0.4% for the core figure.
Against the yen, the dollar slipped 0.1% at 106.09 yen .
Sterling dropped to a seven-week low against the dollar at $1.2777, weighed down by fears the UK-EU trade negotiations may fall apart. It was last down 1.7% at $1.2783.
Treasury yields rise slightly after higher-than-expected jobless claims
Treasury yields rose slightly on Thursday as investors digested latest jobless claims data that came in worst than expected.
The yield on the benchmark 10-year Treasury note gained one basis point at 0.711% and the yield on the 30-year Treasury bond was also slightly higher at 1.474%. Yields move inversely to prices.
Reference: Reuters
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