WASHINGTON (dpa-AFX) - The U.S. dollar exhibited strength against most major currencies on Thursday on rising concerns about global growth after the European Central Bank slashed its forecast for the eurozone economy for 2019 and 2020.
The euro suffered the most damage against the greenback, falling about 1.2% to $1.178, a four-month low.
The European Central Bank slashed its economic growth forecast, citing lingering, mainly external uncertainties. The ECB said it now expects eurozone interest rates to remain at the current level at least till the end of this year.
The bank left its main refi rate at a record low 0% and the deposit rate at -0.40%, whild holding the marginal lending facility rate at 0.25%.
The central bank cut eurozone growth outlook for this year to 1.1% from 1.7%, and the outlook for next year to 1.6% from 1.7%.
The risks surrounding the euro area growth outlook are still tilted to the downside, on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets, the ECB said.
'While there are signs that some of the idiosyncratic domestic factors dampening growth are starting to fade, the weakening in economic data points to a sizeable moderation in the pace of the economic expansion that will extend into the current year,' said ECB President Mario Draghi.
He added, 'The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment.'
The bank said a new series of quarterly targeted longer-term refinancing operations will be launched in September 2019. The loans will have maturity period of two years.
The Brexit uncertainty rendered the Pound Sterling weak. The greenback strengthened to 1.3071 a sterling, from $1.3169 overnight, gaining about 0.75%.
The Japanese retained its safe haven status, rising to 111.48 at one stage. It shed some gains subsequently and was trading at 111.66 yen a dollar, compared to previous close of 111.77 a dollar.
The USD/CHF pair is trading at 1.0122, with the greenback gaining about 0.73%. The Aussie is down 0.3% against the greenback. The dollar is gaining against the Canadian loonie as well, edging up by about 0.13%.
In U.S. economic news, the Labor Department's report showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended March 2nd.
The report said initial jobless claims edged down to 223,000, a decrease of 3,000 from the previous week's revised level of 226,000. Economists had expected jobless claims to come in unchanged compared to the 225,000 originally reported for the previous week.
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