Dollar pares gains and ends lower in NY on Powell's dovish comments

The greenback pared its gains made in Asia and Europe and fell in New York trading to end the day lower on Thursday as Federal Reserve Chairman Jerome Powell said the central bank would not be raising rates anytime soon.  
  
Reuters reported U.S. Federal Reserve Chair Jerome Powell on Thursday said an interest rate hike is coming "no time soon" and pushed back against suggestions the central bank might start tapering its bond purchases any time soon.    The economy remains far from the Fed's goals and Powell sees no reason to alter its highly accommodative stance "until the job is well and truly done," he said in a livestreamed interview with a Princeton University professor.  
  
Versus the Japanese yen, although dollar found renewed buying at 103.80 in Australia and jumped to session highs of 104.19 in Asian morning on reports that Biden would increase the U.S. aid package, price retreated to 103.96 on profit-taking. The pair then rebounded to 104.15 at New York open before tumbling to an intra-day low at 103.57 in New York afternoon on Powell's dovish comments.  
  
CNN reported President-elect Joe Biden is expected to unveil a major Covid-19 relief package on Thursday and his advisers have recently told allies in Congress to expect a price tag in the ballpark of usd 2 trillion, according to two people briefed on the deliberations.    The Biden team is taking a "shoot for the moon" approach with the package, one lawmaker in close contact with them told CNN, though they added that the price tag could still change. The proposal will include sizable direct payments to American families, significant state and local funding -- including for coronavirus vaccine distribution and other emergency spending measures -- to help those struggling during the pandemic.  
  
The single currency met renewed selling at 1.2171 in Asian morning and fell to 1.2137 before rebounding in tandem with cable to 1.2167. Price then fell to an intra-day low at 1.2112 at New York open on usd's weakness before rallying to an intra-day high at 1.2178 in New York afternoon on Powell's comments and then weakening on profit-taking.  
  
Although the British pound recovered to 1.3655 in Asian morning, price fell briefly to session lows of 1.3617 before rising to 1.3680 in European morning due to continued expectations that the Bank of England would not move to negative interest rates before retreating to 1.3621. However, price then rallied to a fresh 2-1/2 year peak at 1.3712 in New York on usd's broad-based weakness together with cross-buying of sterling especially vs euro.  
  
On the data front, Reuters reported the number of Americans filing first-time applications for unemployment benefits surged last week, confirming a weakening in labor market conditions as a worsening COVID-19 pandemic disrupts operations at restaurants and other businesses.     Initial claims for state unemployment benefits totaled a seasonally adjusted 965,000 for the week ended Jan. 9, compared to 784,000 in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 795,000 applications in the latest week.  
  
Data to be released on Friday :  
  
New Zealand food price index, China house prices, Japan tertiary industry activity index, UK GDP, industrial output, manufacturing output, construction output, trade balance, France budget balance, CPI, CPI (EU norm), EU trade balance, and U.S. NY Fed manufacturing index, PPI, core PPI, retail sales ex-autos, retail sales, industrial production, capacity utilization, manufacturing output, business inventories, University of Michigan sentiment.