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The dollar fell amid volatile trading yesterday, after a push from strong US economic data receded, while the Swiss franc rose after the country’s central bank cut interest rates by 25 basis points.
The dollar began to reduce its losses after data showed that weekly unemployment claims in the United States fell by four thousand applications to the lowest level in four months at 218 thousand applications, which is less than the expectations of economists in a survey to record 225 thousand applications.
Other reports showed that corporate profits increased at a stronger-than-expected pace in the second quarter, while gross domestic product grew by an unadjusted three percent.
The dollar index, which measures the performance of the US currency against a basket of currencies including the yen and the euro, fell 0.42 percent to 100.52 points, and is on its way to recording its sixth decline in seven sessions, after rising to 100.95 points earlier in the day. The euro rose 0.41 percent to $1.1178.
According to the CME Group’s Fed Watch service, 51.3 percent of traders still expect a second major interest rate cut of 50 basis points at the next meeting of the Federal Reserve (US central bank) on November 6-7.
The dollar fell against the Swiss franc by 0.55 percent to 0.846 francs after the Swiss National Bank reduced interest rates by 25 basis points, following the lead of the Federal Reserve and the European Central Bank, and also left the door open for further reduction as inflation slowed sharply.
Analysts at Goldman Sachs said that the Swiss National Bank’s interest rate cut came as a result of a decline in inflationary pressures driven by the strength of the franc and other factors, and they expect another cut of 25 basis points at the central bank’s meeting in December.
A number of US Central Bank officials spoke yesterday, but a number of them, including Federal Reserve Chairman Jerome Powell, refrained from commenting on monetary policy.
The Japanese currency rose 0.1 percent against the US currency to 144.6 yen to the dollar. Minutes from the Bank of Japan’s July meeting showed that policymakers were divided on how quickly to raise interest rates, highlighting uncertainty about the timing of the next increase in borrowing costs.
The British pound rose 0.71 percent to $1.3417, and is on its way to achieving its largest daily gain in a month.
