Dollar Gains to Highest Since 2003 vs. Euro

The US dollar climbed to the highest level since 2003 against the euro today after the European Central Bank made a move, announcing an expansion of its asset purchase program. The currency also gained against other major counterparts.

While initially it looked like the gains of US currency against the euro might be limited, the rally accelerated and the greenback jumped as much as 2.1 percent against the currency of the eurozone and touched the strongest rate since November 2003. The dollar also rallied to the highest since July 2013 versus the Great Britain pound. The sterling was soft as Britain’s poor economic data reinforced the view that the Bank of England will not raise interest rates anytime soon.

Turning to the news from the United States, US economic data was mixed. The housing report showed an increase of housing starts but a drop of building permits. Unemployment claims fell last week but were still above the forecast level. Nevertheless, the impact of the ECB announcement allowed the dollar to ignore any negative factors that might have impacted it.

EUR/USD sank from 1.1609 to 1.1376 as of 18:41 GMT today. GBP/USD dropped from 1.5140 to 1.5030. USD/JPY advanced from 117.96 to 118.23 after falling to 117.25 earlier during the trading session.

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