2019.06.2016:49:00UTC+00Dollar Loses Notable Ground Against Rivals For 2nd Straight Day

The U.S. dollar exhibited weakness against most of its rivals on Thursday, weighed down by the Federal Reserve's dovish comments a day earlier that hints at a cut in interest rates sometime very soon.

The dollar index dropped to a low of 96.57 and was last seen hovering around 96.65, down nearly 0.5% from previous close.

Against the euro, the dollar was down almost 0.6% at $1.1292 a unit of the EU currency, despite data from the European Commission showing a sharp drop in Eurozone consumer confidence in the month of June.

The flash consumer confidence index declined to -7.2 from -6.5 in May. Economists had expected the index to remain unchanged. In April, the reading was -7.3.

The consumer confidence index for the EU also shed 0.7 points in June to reach -6.9. Both the Eurozone and the EU confidence reading remained above their long-term averages of -10.7 and -10, respectively.

The British pound sterling was gaining about 0.5% with a unit of sterling fetching $1.2703. The dollar had earlier slipped to a low of 1.2727.

The Bank of England maintained its interest rate and quantitative easing, as widely expected, but downgraded growth projection for the second quarter.

The stock of corporate bond purchases was kept at GBP 10 billion and that of government bond purchases at GBP 435 billion.

The bank downgraded its growth outlook for the second quarter to zero from 0.2% as the factors that underpinned first quarter growth faded.

The Japanese yen strengthened to 107.22 a dollar before easing slightly to 107.31, still up by as much as 0.73% over previous close. The Bank of Japan maintained its monetary policy and kept its forward guidance unchanged on Thursday.

The dollar was losing about 0.6% against the aussie with the AUD/USD pair trading at 0.6921.

Against the loonie, the dollar was down 0.63%, at 1.3196, and against Swiss franc, it was down as much as 1.3%, at 0.9814.

The Chinese yuan was up as well, with a unit of dollar fetching 6.8519 yuan, less than 6.9036 yuan Wednesday evening.

On Wednesday, the Federal Reserve left its interest rates unchanged and signaled the possibility of rate cuts amid trade tensions and soft inflation.

The Fed asserted that it will "act as appropriate" to sustain the U.S. economic expansion amid increasing uncertainties about the outlook for the economy.

The central bank omitted its reference to remaining "patient" when determining future changes to interest rates.

Fed Chairman Jerome Powell said after the release of the central bank's monetary policy that many participants believed it would be appropriate for the Fed to cut the fed funds rate given the bank's outlook for growth.

CME Group's FedWatch Tool currently indicates an 85.2% chance the Fed will cut rates by 25 basis points at its next meeting at the end of July.

In U.S. economic news today, a report from the Labor Department showed a modest decrease in first-time claims for U.S. unemployment benefits in the week ended June 15th.

The report said initial jobless claims dipped to 216,000, a decrease of 6,000 from the previous week's unrevised level of 222,000. Economists had expected jobless claims to edge down to 220,000.

A separate report from the Philadelphia Federal Reserve showed regional manufacturing activity was nearly stagnant in the month of June.