Investing.com - The dollar dropped to five-month lows against the other major currencies on Thursday, after the Federal Reserve announced a lower than expected number of rate hikes this year and as investors eyed the release of U.S. economic reports later in the day.
USD/JPY tumbled 1.22% to 111.18.
The dollar weakened broadly after the Fed left its monetary policy unchanged on Wednesday and said that it is likely to raise interest rates twice this year – and not four times, as initially estimated.
Fed policymakers said the U.S. economy faces risks from an uncertain global economy, although moderate growth and "strong job gains" would allow it to tighten policy this year.
EUR/USD rallied 1.03% to 1.1342.
In the euro zone, final data showed that the consumer price index rose 0.2% in February, exceeding expectations for a 0.1% uptick. Year-on-year, consumer prices fell 0.2% last month, in line with expectations.
Core CPI rose 0.4% in February, after a 1.7% decline the previous month.
The dollar was lower against the pound and the Swiss franc, with GBP/USD up 0.75% at 1.4367 and with USD/CHF sliding 0.88% to 0.9681.
Earlier Thursday, the Swiss National Bank held its deposit rate steady at -0.75% and said it would continue to intervene in the currency markets to weaken the franc, which it says remains “significantly overvalued.”
The SNB also cut its forecast for economic growth this year to between 1% and 1.5%, from approximately 1.5% previously.
Later in the day, the Bank of England was expected to leave its monetary policy unchanged at the conclusion of its monthly meeting.
Meanwhile, the Australian and New Zealand dollars were sharply higher, with AUD/USD up 1.19% at 0.7642 and with NZD/USD rallying 1.56% to 0.6828.
In Australia, data earlier showed that the number of employed people rose by 300 in February, disappointing expectations for an increase of 10,000.
However, Australia’s unemployment rate ticked down to 5.8% last month from 6.0% in January. Analysts had expected the unemployment rate to remain unchanged in February.
The kiwi found support after Statistics New Zealand said gross domestic product rose 0.9% in the fourth quarter, exceeding expectations for 0.6%.
Year-on-year, New Zealand GDP expanded by 2.3% in the fourth quarter, compared to expectations for 2.0%.
USD/CAD declined 0.80% to 1.2994.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 1.01% at a five-month low of 94.74.