By Chiara Albanese The dollar was firmer against the euro Thursday despite deepening uncertainty about the Federal Reserve's timeline for pulling back on stimulus following a meeting of the U.S. central bank's policy-making committee. The Fed highlighted the "modest" pace of U.S. economic activity in the first half of 2013 and emphasized low inflation. Currency traders initially seized on the message, which they interpreted as slightly downbeat, and sold the dollar. But the U.S. currency paired back some of its overnight losses. One euro bought $1.3247 in recent trading Thursday, compared with $1.3303 late Wednesday, according to data provided by EBS. The dollar is little changed on the year against the euro, after strengthening by about 3.5% against the currency since Feb. 1, the highest level of the year. Some of the dollar's earlier strength stemmed from the belief that the Fed would start to rein in its bond purchases, which have tended to weaken the dollar, in September. Now, some foreign-exchange strategists say it could start later than expected. "There was no reference to the tapering timeline outlined at the June press conference. With the Fed usually keen to foreshadow policy changes at least one meeting in advance, a tapering announcement as soon as September now seems increasingly unlikely," BNP Paribas SA wrote in a note. Markets attention is now turning to Thursday's rate announcements by the Bank of England at 1100 GMT and by the European Central Bank at 1145 GMT. The pound has been on a weakening trend over the last days, declining to $1.5160 Thursday against the dollar from $1.54 July 25, in anticipation that the BOE will unveil a form of forward rate guidance. But this is likely to be announced Aug. 7 alongside the release of the bank's Quarterly Inflation Report, and Thursday analysts don't expect significant changes to be announced. "No change in the BOE's monetary policy stance is expected at today's meeting although it is uncertain whether they will release a statement. If a statement is released today it will likely be similar to the one at their last meeting stating higher U.K. rates are still not warranted by recent UK economic developments," said Lee Hardman, a currencies strategist at Bank of Tokyo-Mitsubishi UFJ. The European Central Bank press conference will also be followed closely, as investors will look for more information on the forward guidance introduced in July, in particular on the length of the 'extended period of low rates' described by ECB President Mario Draghi. In July, the ECB introduced a weak form of interest rate guidance, pushing the euro briefly below $1.28 against the dollar. "Potential indications that the ECB is planning to embed its macroeconomic projections into the forward guidance communication could increase the significance of the September meeting when the next set of growth and inflation forecasts will be released," Citigroup said. At 0900 GMT, the euro was trading at $1.3249 against the dollar, compared with $1.3303 late Wednesday in New York, according to trading system EBS. The dollar was at ¥98.612 against the yen, compared with ¥97.88, while the euro was at ¥130.63, compared with ¥130.26. The pound was trading at $1.5201 against the dollar, compared with $1.5208 late Wednesday in New York. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of currencies, was trading at 74.347, compared with 74.048 late Wednesday in New York.

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