Investing.com - The dollar eased off a five-month low against the other major currencies on Friday, as markets digested the Federal Reserve’s decision to lower the number of interest rate hikes this year.
EUR/USD slid 0.43% to 1.1266.
The greenback recovered from broad losses posted 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.
The dollar found some support after the U.S. Department of Labor said on Thursday that jobless claims rose less-than-expected last week.
In addition, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 12.4 this month from February's reading of -2.8.
USD/JPY was steady at 111.41.
Earlier Friday, the minutes of the Bank of Japan’s January policy meeting showed that policymakers made two proposals, one to expand the bank's asset-buying program and another to add negative interest rates to asset purchases.
According to the minutes, the BOJ eventually decided to adopt the negative interest rate policy after several members argued the move would help prevent external factors from delaying the eradication of Japan's "deflationary mindset".
The dollar was higher against the pound and the Swiss franc, with GBP/USD down 0.26% at 1.4442 and with USD/CHF rising 0.25% to 0.9701.
The pound still remained close to a one-month high against the greenback after the Bank of England said on Thursday that it was holding the benchmark interest rate at 0.50%, in a widely expected move. The rate has been held at that level since March 2009.
The central bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.
Meanwhile, the Australian and New Zealand dollars were weaker, with AUD/USD down 0.29% at 0.7625 and with NZD/USD declining 0.73% to 0.6798.
USD/CAD added 0.15% to 1.2997, off Thursday’s five-month low of 1.2941.
The commodity-related loonie remained supported as oil prices moved back above $40 a barrel amid fresh hopes for a potential production freeze by major oil producers.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.34% at 95.10, off a fresh five-month low of 94.61 hit overnight.