Dollar bounces back after U.S. housing sector data, Draghi

The dollar bounced off session lows and moved higher against other major currencies on Thursday, after the release of better than expected U.S. housing sector data and as comments by European Central Bank President Mario Draghi weighed broadly on the euro.

The National Association of Realtors said pending home sales decreased by 0.8% last month, compared to expectations for a decline of 1.0%.

Earlier Thursday, the U.S. Department of Labor said initial jobless claims increased by 14,000 in the week ending April 22 to 257,000 from the previous week’s revised total of 243,000. Analysts expected jobless claims to rise by 2,000 to 245,000 last week.

Separately, the Commerce Department said that durable goods orders rose by 0.7% last month, compared to' expectations for a gain of 1.2%. February’s orders were revised to an increase of 2.3% from a previously reported 1.8% climb.

Core durable goods orders, which exclude volatile transportation items, fell 0.2% last month, compared to forecasts for a 0.4% increase.

The data came a day after U.S. President Donald Trump confirmed that his tax reform plan would cut the income tax rate paid by public corporations to 15% from 35% and make major changes to the individual-tax system.

However, the one page plan offered little new information on how it would be paid for without increasing the deficit and is likely to face legislative hurdles.

EUR/USD slid 0.34% to 1.0867, pulling away from a five-month peak of 1.0951 hit on Wednesday, after ECB President Draghi said there isn’t enough evidence to change the ECB’s inflation outlook.

The remarks came after the central bank left its benchmark interest rate unchanged at a record-low 0.0%, in line with forecasts.

The ECB also confirmed that the size of its monthly quantitative easing program would continue at the new monthly pace of €60 billion until the end of December 2017, “or beyond, if necessary”.

Elsewhere, GBP/USD rose 0.35% to 1.2895, just off a six-month peak of 1.2915 hit overnight.

USD/JPY added 0.17% to 111.34, off a one-week trough of 111.03 reached earlier in the session, while USD/CHF edged up 0.15% to trade at 0.9948.

The Bank of Japan kept monetary policy on hold on Thursday, in a widely expected move.

The Australian and New Zealand dollars moved lower, with AUD/USD down 0.41% at 0.7443 and with NZD/USD declining 0.48% to 0.6856.

Meanwhile, USD/CAD gained 0.13% to 1.3637, re-approaching a 14-month high of 1.3648 hit overnight after the U.S. President said he does not plan to scrap the North American Free Trade Agreement (NAFTA) but renegotiate it instead.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.23% at 99.08, off session lows of 98.69.