By William L. Watts and Sarah Turner, MarketWatch
FRANKFURT (MarketWatch)—The U.S. dollar held modest gains in quiet trade on Thursday, while the euro remained lower versus rivals but posted little reaction to the European Central Bank’s widely-anticipated decision to leave interest rates unchanged.
The ICE dollar index DXY +0.18% , which measures the greenback against a basket of six other currencies, rose to 80.360, up from 79.151 in late North American trading Wednesday.
The ECB, as expected, left its key lending rate unchanged at 1%. Investors are awaiting ECB President Mario Draghi’s monthly news conference for his assessment of a weakening euro-zone economy and mounting calls by European officials to leaven the region’s austerity drive with growth-oriented measures. ECB rate decision
The euro EURUSD 0.0000% traded at $1.3128, down from $1.3157 late Wednesday but little changed from the level seen ahead of the ECB announcement. Draghi’s news conference is scheduled to begin at 8:30 a.m. Eastern time.
“It would seem probable that while the ECB president will likely be forced to take a dovish tone, we are unlikely to get any encouragement at this stage for [a third long-term refinancing operation] or an explicit acknowledgment of the restarting” of the central bank’s bond-buying program, said Jeremy Stretch, currency strategist at CIBC in London.
“But on the basis of the assumption that we will get very little from the Draghi press briefing, any surprises are likely to be on the dovish side and encourage a lower euro,” he said, in a note.
The dollar index had advanced Wednesday after data showed unemployment in the euro zone hit its highest level since the introduction of the shared currency, and manufacturing data weakened as well.
The British pound GBPUSD 0.0000% changed hands at $1.6171, falling from $1.6203. This month, the ECB and the Bank of England are holding interest-rate meetings on different dates, with the BOE not due to meet until next Thursday.
The Markit/CIPS purchasing managers’ index for the U.K. services sector fell to 53.3 in April from 55.5 in March. A reading of more than 50 indicates growth.
The Australian dollar AUDUSD 0.0000% traded at $1.0283, down from $1.0329, extending its losses after a bigger-than-expected interest-rate cut by the Reserve Bank of Australia on Tuesday.
Against the Japanese yen, the dollar USDJPY 0.0000% bought ÂĄ80.39, rising from ÂĄ80.16 in late trading on Wednesday.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt.
