LONDON, June 24 (bdnews24.com/AFP) - The European single currency slid under 1.23 dollars on Thursday, as investors sought the safe-haven US unit after the Fed stoked concerns over the eurozone debt crisis, analysts said.
The euro fell to 1.2278 dollars from 1.2310 dollars late in New York on Wednesday.
The pound gained to 1.4974 dollars from 1.4955. Against the Japanese currency, the dollar sank to 89.55 yen from 89.83 yen on Wednesday.
The US Federal Reserve delivered a gloomy prognosis for the world's biggest economy on Wednesday, and warned Europe's fiscal problems were taking a toll.
"Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad," the Federal Open Market Committee said.
The US central bank also held its federal funds rate target between zero and 0.25 percent, in line with market expectations.
"The Federal Reserve signalled that growth was likely to disappoint over the course of the next 12 months, due in no small part from the problems in Europe," said CMC Markets analyst Michael Hewson.
"Against this background it was no surprise that they stuck to the same low rate mantra that has been in place since March 2009."
CurrenciesDirect analyst Alistair Cotton added: "The Fed acknowledged the eurozone problems are acting as a headwind for the recovery and also pointed to continuing high unemployment and a depressed housing sector as key issues constraining growth."
Investors were spooked by new signs of weakness in the US recovery shown in housing and other data.
A report from the Commerce Department showed that sales of new homes in the United States plunged to a record low in May after the expiration of a home-buyer tax credit.
Elsewhere, China's central bank left its yuan exchange rate basically unchanged on Thursday following its weekend vow to let the currency trade more freely amid mounting US pressure.
The People's Bank of China set the central parity rate -- the centre point of the currency's allowed trading band -- at 6.8100 to the dollar, only slightly stronger than Wednesday's 6.8102.
Meanwhile the British pound continued climbing against the US currency in the wake of the government's deficit-slashing emergency budget.
Sterling was also in favour after it emerged on Wednesday that one Bank of England policymaker had voted in favour of an interest rate hike earlier this month.
In London trading on Thursday, the euro was at 1.2278 dollars against 1.2310 dollars on Wednesday, at 109.95 yen (110.58), 0.8199 pounds (0.8227) and 1.3566 Swiss francs (1.3606).
The dollar stood at 89.55 yen (89.83) and 1.1049 Swiss francs (1.1049).
The pound was at 1.4974 dollars (1.4955).
On the London Bullion Market, the price of gold rose to 1,234.35 dollars an ounce from 1,226.50 dollars an ounce on Wednesday.
