Dollar Rises as ECB Cuts Growth Forecasts
December 13 2018 - 12:09PM
Dow Jones News
By Sam Goldfarb
The dollar rose Thursday after the European Central Bank cut its
economic growth forecasts and signaled that it would preserve its
large bond portfolio, reinforcing bets that the U.S. economy will
outpace its peers in the coming months.
The WSJ dollar index, which measures the U.S. currency against a
basket of 16 others, was recently up 0.1% at 90.63.
After edging lower overnight, the dollar ticked higher after the
ECB lowered its growth forecast and ECB President Mario Draghi said
that the "balance of risks is moving to the downside" for the
eurozone economy.
The ECB confirmed it will end net bond purchases under its
stimulus program this month but also pledged to hold its EUR2.6
trillion ($2.9 trillion) stock of bonds for "an extended period of
time past the date when it starts raising the key ECB interest
rates," according to a statement.
The ECB lowered its 2018 forecast for gross domestic product
growth in the eurozone by 0.1 percentage point to 1.9% and shaved
its 2019 forecast by a similar amount to 1.7%.
While investors have grown more nervous about the U.S. economy
in recent weeks, many still believe it is in better shape than most
other developed countries. That has helped support the dollar even
as investors have scaled back their expectations for future
interest-rate increases by the Federal Reserve and as U.S. Treasury
yields have fallen along with U.S. stock indexes -- trends that
often would be associated with a weakening dollar.
The euro was recently down 0.2% against the dollar at
$1.1353.
Write to Sam Goldfarb at sam.goldfarb@wsj.com
(END) Dow Jones Newswires
December 13, 2018 11:54 ET (16:54 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.