The dollar index dropped 0.42 per cent to 100.52, on track for its sixth decline in seven sessions, after gaining as much as 100.95 earlier in the day
The dollar softened in choppy trading on Thursday after a boost from healthy U.S. economic data faded, while the Swiss franc gained after the country’s central bank cut interest rates by 25 basis points.
The greenback began paring losses after data showed U.S. weekly jobless claims fell by 4,000 to a four-month low of 218,000.
Other reports showed corporate profits rose at a more robust pace than initially thought in the second quarter while gross domestic product grew at an unrevised 3 per cent.
A gauge of new orders for key U.S.-manufactured capital goods unexpectedly increased in August, although business spending on equipment seems to have waned in the third quarter.
Once again we have this split between the Fed cutting rates and an economy that is essentially growing at 3 per cent or more, so the market does not quite know what to make of this, according to Joseph Trevisani, senior analyst at FXStreet.
So why are we cutting rates? Well, what have we got to lose? It is not going to make the economy worse, it may make the economy better and the neutral rate is somewhere south of here so let’s turn around and head in that direction, he said.
The dollar index dropped 0.42 per cent to 100.52, on track for its sixth decline in seven sessions, after gaining as much as 100.95 earlier in the day. The euro was 0.41 per cent higher at $1.1178.
The Fed has recently hinted a shift in focus away from inflation and towards keeping the labour market healthy, but delivered a larger-than-usual 50 bp interest rate cut last week.
