Investing.com - The dollar took a dive on Wednesday after the minutes from the Federal Reserve's March policy meeting revealed monetary authorities unanimously voted to scrap a threshold that would have triggered interest-rate hikes.
In U.S. trading on Wednesday, EUR/USD was up 0.41% at 1.3853.
The Federal Reserve Board of Governors unanimously voted to scrap a threshold at which interest rates would rise once the unemployment rate hits 6.5%, according to the minutes of the Fed's March policy meeting.
In the past, the Fed had indicated rates could rise when the unemployment rate hits or approaches 6.5% provided that figure accompanied a 2.5% inflation rate.
Today, the headline unemployment rate stands at 6.7%, not far from the previous threshold, though inflation remains well below 2.5%, prompting the Federal Reserve to do away with its rate-hike target.
"Participants agreed that the existing forward guidance, with its reference to a 6.5% threshold for the unemployment rate, was becoming outdated as the unemployment rate continued its expected gradual decline," the minutes read.
"Most participants felt that the quantitative thresholds had been very useful in communicating policy intentions when employment was far from mandate-consistent levels, but, with the economy having moved appreciably closer to maximum employment, the forward guidance should emphasize that the Committee is focusing more on a broader set of economic indicators."
The dollar dropped on the news, as Fed Chair Janet Yellen stating that policy must remain accommodative for some time to come.
The March policy meeting minutes reflected that stance.
"With respect to forward guidance about the federal funds rate, all members judged that, as the unemployment rate was likely to fall below 6.5% before long, it was appropriate to replace the existing quantitative thresholds at this meeting," the minutes read.
"Almost all members judged that the new language should be qualitative in nature and should indicate that, in determining how long to maintain the current 0 to 0.25% target range for the federal funds rate, the Committee would assess progress, both realized and expected, toward its objectives of maximum employment and 2% inflation."
The dollar was down against the yen, with USD/JPY down 0.07% at 101.75, and down against the Swiss franc, with USD/CHF down 0.40% at 0.8797.
The greenback was down against the pound, with GBP/USD up 0.25% at 1.6790.
The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.52% at 1.0867, AUD/USD up 0.34% at 0.9390 and NZD/USD up 0.47% at 0.8715.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.35% at 79.57.
On Thursday, the U.S. Labor Department is to release its weekly report on initial jobless claims.