In early European deals on Thursday, the dollar slipped to new multi-month lows against its European and Swiss counterparts as fresh concerns about the strength of global recovery resurfaced. Yesterday, the Federal Reserve lowered its forecast of U.S. economic growth for the next three years. Minutes from its April meeting showed the Fed projected the world's biggest economy to contract by up to 2 percent this year with the unemployment rate rising to as high as 9.6 percent. They also showed that Fed policymakers had considered buying more securities to spur recovery, a move that would inject more dollars into the market. At the April meeting the FOMC voted unanimously to keep the target range between 0 and 0.25 percent. In the accompanying statement the FOMC noted that "the economy has continued to contract, though the pace of contraction appears to be somewhat slower." "Although the economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, economic activity is likely to remain weak for a time," the statement read. Once again, the FOMC said that interest rates will remain exceptionally low for some time, adding that they will "employ all available tools to promote economic recovery and to preserve price stability." A disappointing 2009 outlook from Hewlett-Packard, the world's biggest PC maker, also fanned concerns about corporate profits in a slowing economy. The dollar, which closed yesterday's trading at 1.1003 against the Swiss franc, fell to a new multi-month low of 1.0962 during early deals on Thursday. The next downside target level for the U.S. currency is seen at 1.07. In early trading on Thursday, the dollar weakened to 1.3840 against the euro. This set the lowest point for the dollar since January 05. On the downside, 1.40 is seen as the next target level for the dollar. At Wednesday's close, the euro-dollar pair was quoted at 1.3781. At 4:55 am ET Thursday, the dollar spiked up to 1.5518 against the pound, moving from a new multi-month low of 1.5819 hit in early Asian deals today. If the dollar gains further, it may likely target the 1.535 level. The pound-dollar pair was worth 1.5755 at Wednesday's close. The pound plummeted after the Standard & Poor's revised the outlook on the U.K. to negative from stable. The rating agency affirmed 'AAA' long-term and 'A-1+' short-term sovereign credit ratings. Standard & Poor's credit analyst David Beers said, "We have revised the outlook on the U.K. to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100% of GDP and remain near that level in the medium term."

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