IV:Dollar broadly lower after Fed holds stimulus program
Investing.com - The U.S. dollar was broadly lower against the other major currencies on Thursday, after the Federal Reserve's decision to hold the current level its bond-purchase program weighed on demand for the greenback.
During late European morning trade, the dollar was lower against the euro, with EUR/USD adding 0.28% to 1.3561.
The Fed refrained on Wednesday from reducing the USD85 billion pace of its monthly asset purchases and said the central bank must determine its policies based on "what’s needed for the economy," even if it surprises markets.
Speaking after the conclusion of the Fed's two-day policy-setting meeting, Fed Chairman Ben Bernanke Bernanke said he wanted to "wait a bit longer and to try to get confirming evidence" that the economy is showing signs of lasting improvement.
Bernanke refused to commit to reducing bond purchases this year, saying the stimulus program was "not on a preset course."
Separately, the Fed cut its projection for 2013 economic growth to a 2.0% to 2.3% range from a June estimate of 2.3% to 2.6%.
The greenback was higher against the pound, with GBP/USD retreating 0.46% to 1.6070, as investors locked in gains after sterling rallied to eight-month highs against the dollar on Wednesday.
Earlier Thursday, official data showed that U.K. retail sales fell 0.9% in August, confounding expectations for a 0.4% rise, after a 1.1% increase the previous month.
Elsewhere, the greenback jumped higher against the yen, with USD/JPY gaining 0.92% to trade at 98.83, but slipped lower against the Swiss franc, with USD/CHF falling 0.27% to 0.9095.
The Swiss National Bank on Thursday re-affirmed its cap on the franc and vowed to defend it with unlimited currency interventions to protect the economy.
The comments came after the SNB held its benchmark interest rate near zero, in a widely expected move.
In Japan, official data showed that the trade deficit narowed to JPY0.79 trillion in August, from an upwardly revised deficit of JPY0.91 trillion the previous month. Analysts had expected the trade deficit to narrow to JPY0.81 trillion last month.
The greenback was mixed to lower against its Canadian, Australian and New Zealand counterparts, with USD/CAD sliding 0.32% to 1.0187, AUD/USD dipping 0.02% to 0.9518 and NZD/USD climbing 0.68% to 0.8427.
Official ata earlier showed that New Zealand's gross domestic product expanded by 0.2% in the second quarter, in line with expectations, after an upwardly revised 0.4% expansion in the three months to March.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.02% to 80.21.
Later in the day, the U.S. was to release the weekly report on initial jobless claims, as well as the Philly Fed manufacturing index and data on existing home sales.
