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)

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