Swiss franc continues to pull back after central bank statement
By Deborah Levine, Barbara Kollmeyer and V. Phani Kumar, MarketWatch
NEW YORK (MarketWatch) — The U.S. dollar turned back down against the euro Thursday, following tick for tick with U.S. stocks that struggled to recover from the prior day’s steep sell-off.
Currency markets remained jittery after volatility in other markets — including triple-digit moves by the Dow Jones Industrial Average DJIA +2.17% and U.S. Treasury yields probing all-time lows — left traders less willing to take major directional positions without a clear indication of whether investors may still be worried about holding riskier assets.
The euro EURUSD +0.38% turned up to $1.4208 from $1.4193. European stocks and the euro had fallen sharply Wednesday following unsubstantiated rumors that France’s credit rating could be downgraded. See more on dollar, France’s credit rating..
In recent action, the Standard & Poor’s 500 Index SPX +2.41% rose 1.5%. See story on U.S. stocks.
The greenback had been under pressure in earlier trading, when European equities were rising after the prior day’s hefty sell-off linked to European debt worries.
It stayed higher as U.S. stock futures fell, taking little positive from a report showing fewer Americans claimed first-time unemployment benefits in the latest week. Read about jobless claims.
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The dollar USDJPY -0.05% pared losses against the Japanese currency, fetching 76.82 yen compared with ¥76.85 in late New York trading Wednesday. The yen tends to gain when traders seek safer assets, but is also subject to movements in U.S. yields. Higher Treasury yields make the dollar more attractive to Japanese investors. Bonds pared an earlier decline, which pushed yields up. Read about Treasury bonds.
That helped the dollar index, a measure of the greenback’s performance against six major currencies including the yen.
The dollar index DXY -0.08% pared gains to 74.777 from 74.688 in late North American trade Wednesday.
The British pound GBPUSD +0.48% extended gains to 0.42%, buying $1.6186.
Swiss franc falls further
Among the bigger moves of the day was the more than 5% gain by the dollar and euro against the Swiss franc.
The franc extended losses against the greenback and the euro after Swiss National Bank Deputy President Thomas Jordan reportedly said in an interview with Swiss newspaper Tages Anzeiger that the country could legally peg the franc to the euro temporarily to stem its strength.
He said such measures to influence exchange rates are allowed under the Swiss mandate as long as they are consistent with price stability. Read more on Swiss franc dropping.
The dollar rose against the Swiss franc, with the U.S. unit USDCHF +5.03% changing hands at 76.72 centimes, up from 72.80 centimes. One hundred centimes make a Swiss franc.
The euro jumped more than 6% against the franc EURCHF +5.43% .
