NEW YORK, Sept. 14 (Xinhua) — The U.S. dollar rose in late trade on Thursday, as the European Central Bank (ECB) announced a tenth straight hike in its main interest rate.
The dollar index, which measures the greenback against six major peers, rose 0.58 percent to 105.3816 in late trade, hitting its highest level in six months.
The ECB’s rate hikes have lifted its main deposit facility from -0.5 percent in June 2022 to a record 4 percent. The ECB’s move on Thursday also took rates on its main refinancing operations and the lending facility 25 basis points higher, to 4.5 percent and 4.75 percent respectively.
In a statement, the ECB indicated that further hikes may be off the table for now. “Based on its current assessment, the Governing Council considers that the ECB’s key interest rates have reached levels which, if sustained for a sufficiently long duration, will make a substantial contribution to a timely return of inflation to target.”
“Future decisions by the Governing Council of the ECB will ensure that ECB policy rates will be set at sufficiently restrictive levels for as long as necessary,” it added.
The euro fell sharply after the announcement. In late New York trading, the euro was down to US$1.0636 from $1.0732 in the previous session, and the British pound was down to US$1.2402 from $1.2486.
In the week ended Sept. 9, claims for government unemployment benefits rose by 3,000 to 220,000 in the United States, the US Bureau of Labor Statistics (BLS) said on Thursday. The four-week moving average of claims fell by 5,000 to 224,500 in the past week, the lowest level since late February.
“Layoffs remain low and at the moment there are no signs that companies are laying off workers in large numbers in response to tight monetary policy aimed at weakening demand and economic activity,” said Rubeela Farooqi, chief US economist at High Frequency Economics.
Despite the US economic data, views for the Federal Reserve remained largely intact. Expectations that the U.S. central bank is likely to keep interest rates steady at its Sept. 19-20 policy meeting are at 97 percent, according to CME’s FedWatch Tool on Thursday.
In late New York trading, the US dollar bought 147.4410 Japanese yen, down from 147.45 Japanese yen from the previous session. The US dollar rose to 0.8962 Swiss francs from 0.8934 Swiss francs and it fell to 1.3509 Canadian dollars from 1.3564 Canadian dollars. The US dollar increased to SEK 11.2022 from SEK 11.1379.