Dollar extends rally vs. yen, off highs vs. euro

The dollar extended a rally against the yen on Thursday after the Bank of Japan aggressively stepped up easing measures, while the euro rebounded after falling to four-month lows against the greenback earlier in the session.

During U.S. morning trade, the dollar extended gains against the yen, with USD/JPY advancing 3.33% to 96.13.

The yen fell across the board on Thursday after the BoJ implemented aggressive easing measures aimed at spurring growth and combating deflation in the world’s third largest economy.

The central bank, under the leadership of newly appointed Governor Haruhiko Kuroda, said it plans to double its asset purchase program over the next two years and extend the maturities of the bonds it purchases.

The dollar erased gains against the euro, with EUR/USD edging up 0.08% to 1.2860, after touching session lows of 1.2747.

The euro plumbed four-month lows against the dollar after European Central Bank President Mario Draghi said the bank was ready to act to cut rates if needed, adding that monetary policy will remain accommodative for as long as is needed.

The comments came after the ECB left interest rates on hold at 0.75%.
The single currency recovered after the ECB chief said the bank’s commitment to the single currency is largely underestimated.

The dollar was lower against the pound, with GBP/USD rising 0.39% to 1.5191.

The Bank of England left interest rates on hold at 0.5% and the size of its asset purchase program unchanged at GBP375 million after its policy meeting on Thursday.

The decision came on the heels of data showing that the U.K. service sector expanded at the fastest pace in seven months in March, fuelling hopes that the economy will narrowly avoid a triple-dip recession.

The dollar was almost unchanged against the Swiss franc, with USD/CHFedging up 0.04% to 0.9456.

The greenback was broadly higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD dipping 0.06% to 1.0140,AUD/USD dropping 0.60% to 1.0397 and NZD/USD losing 0.44% to trade at 0.8379.

The Australian dollar was trading close to two-month highs during the Asian session after official data showed that Australian retail sales rose 1.3% in February, far exceeding forecasts for a 0.3% gain.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.36% to 83.18. 

In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week rose by 28,000 to a seasonally adjusted 385,000, compared to expectations for a decrease of 7,000 to 350,000.

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