The ECB left its policy stance unchanged as expected, keeping a rate hike later this year on the table. The fact that euro zone economy suffers its biggest slowdown in half a decade weighed.
The dollar rose to a more than five-week high against the euro after ECB President Mario Draghi said economic risks have moved to the downside. He added that near-term data is likely to be weaker than previously anticipated.
The euro was 0.45% lower against the dollar at $1.1329, after falling as low as $1.1308, its weakest since Dec. 17. The euro has lost around 1.6% over the past two weeks as investors bet the ECB will keep monetary policy accommodative for an extended period.
The dollar index, which tracks the greenback versus the euro, yen, sterling and three other currencies, was up 0.33%.
START TRADINGForex – Commodities – Dollar to a 5-week high vs euro on ECB warning
The pound has been the biggest gainer this month in the G10 currency universe. Its peers such as the dollar and the euro dogged by concerns of a spreading slowdown in the global economy.
One-month sterling implied volatility fell to a 2-1/2-month low at 10.35 “vol” as it is commonly known, its lowest level since Nov. 8. It briefly hit a more than two-year high above 15 vol in mid-November.
The Sterling consolidated gains on Thursday after rocketing to a 11-week high overnight. Growing optimism that British lawmakers would be able to avoid a no-deal Brexit weighed. Against the euro, the pound was slightly weaker at 87.05 pence.
The Aussie dollar was a big mover on Thursday, trading down 0.6% at $0.7104. National Australia Bank said it would raise mortgage rates by 12 to 16 basis points. Earlier, solid jobs data helped the Aussie to rise.
Oil prices were steady as economy concerns offset support from Venezuela turmoil. renewed concerns about the global economic outlook offset support from a U.S. threat of sanctions on OPEC member Venezuela. Brent crude was down 10 cents or 0.2 percent at $61.04 a barrel by 1435 GMT, while U.S. crude rose 15 cents or 0.3 percent to $52.77.
Sources: Reuters, Investing, CNN money
PLEASE NOTE The information above is not investment advice.