2022.03.1720:37:00UTC+00Dollar Loses Ground Against Major Rivals

The U.S. dollar drifted lower and touched it lowest level in a week on Thursday with investors weighing the Federal Reserve's latest monetary policy announcement.

The central bank hiked its benchmark interest rate by 25 basis points on Wednesday, but then the market had already factored in such a move, and a section traders of them expected a bigger increase in rates.

In U.S. economic news, data from the Labor Department showed initial jobless claims dipped to 214,000 in the week ended March 12th, a decrease of 15,000 from the previous week's revised level of 229,000.

Economists had expected jobless claims to edge down to 220,000 from the 227,000 originally reported for the previous week.

A report from the Commerce Department showed housing starts rebounded by much more than expected in the month of February, spiking by 6.8% to an annual rate of 1.769 million, after plunging by 5.5% to a revised rate of 1.657 million in January.

Meanwhile, the report showed building permits slumped by 1.9% to an annual rate of 1.859 million in February after rising by 0.5% to a revised rate of 1.895 million in January.

The Fed also released a report showing industrial production in the U.S. increased in line with economist estimates in the month of February.

The dollar index dropped to 97.73 before recovering to 98.00, but still remains well below the unchanged line, losing about 0.63%.

Against the Euro, the dollar has weakened to $1.1096 from $1.1035. Eurozone inflation rose more than initially estimated in February, final data from Eurostat showed on Thursday. Inflation advanced to a fresh record high 5.9% in February from 5.1% in January. The rate was revised up from 5.8%.

The dollar is trading at $1.3151 against Pound Sterling, down slightly from the previous close of $1.3149. The Bank of England today raised its key rate for the third straight meeting as inflation outlook worsened after the Russian invasion of Ukraine. Policymakers led by Governor Andrew Bailey decided to increase the key interest by 25 basis points to 0.75%.

Against the Japanese currency, the dollar is slightly weak, fetching 118.67 yen a unit, as against 118.75 yen on Wednesday.

Against the Aussie, the dollar is trading at 0.7379, weakening from 0.7289.

The Swiss franc has firmed to 0.9373 a dollar, gaining from 0.9408. Switzerland's exports grew for a second straight month and at a faster pace of 8.1% in February, while imports declined, data from the Federal Customs Administration showed on Thursday. Exports were up 2% in January.

Imports decreased 0.9% monthly in February, after a 0.4% increase in the previous month.

The Loonie is gaining about 0.5% against the dollar, having firmed to C$1.2616 from C$1.2679.