WASHINGTON (dpa-AFX) - The U.S. dollar firmed against its major rivals on Thursday, rebounding smartly thanks to some encouraging economic data.
The dollar had slid on Wednesday after Fed Chairman Jerome Powell indicated the central bank isn't in a hurry to raise interest rates. The bank, however, announced a reduction in monthly bond purchases.
The Fed restated its belief that inflation would be 'transitory' and it would await more signs of job growth before deciding to start hiking rates.
A report showing the growth in U.S. service sector activity accelerated to a new record high in the month of October, and data showing a notable drop in initial jobless claims in the week ended October 30th supported the dollar.
Labor Department data showed initial jobless claims dipped to 269,000 in the week ended October 30th, a decrease of 14,000 from the previous week's revised level of 283,000. Economists had expected initial jobless claims to edge down to 277,000 from the 281,000 originally reported for the previous week.
Meanwhile, a separate report from the Commerce Department showed the U.S. trade deficit widened to $80.9 billion in September from a revised $72.8 billion in August. Economists had expected the deficit to widen to $74.1 billion from the $73.3 billion originally reported for the previous month.
The dollar index rose to 94.47 around noon before easing to 94.33, still fairly high above the unchanged line, gaining about 0.5%.
Against the Euro, the dollar strengthened to 1.1557 from 1.1612.
The dollar is stronger against Pound Sterling by as much as 1.3% at 1.3498 after the Bank of England left its benchmark interest rate and its Quantitative Easing unchanged at current levels.
The Yen is stronger against the dollar at 113.77.
Against the Aussie, the dollar has firmed to 0.7399, gaining from 0.7448.
The Swiss franc is marginally down against the dollar at 0.9125. The Loonie weakened to 1.2461 a dollar from 1.2393 after oil prices tumbled.
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