Investing.com - The dollar traded largely lower against most major currencies on Thursday after the Federal Reserve's Wednesday policy statement left investors concluding that interest rates will remain low for the foreseeable future, while the insurgency in Iraq also softened the greenback.
Positive U.S. data supported the U.S. currency, however.
In U.S. trading on Thursday, EUR/USD was up 0.07% at 1.3604.
The Federal Reserve on Wednesday left benchmark interest rates unchanged at 0.00-0.25% and cut its monthly bond-buying program to $35 billion from $45 billion in a widely expected move.
Still, the dollar weakened after the Fed didn't suggest how much time will elapse after its monthly stimulus program ends and when interest-rate hikes begin, with investors concluding that the Fed will take its time to tighten policy.
"It likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored," the Fed said in its Wednesday policy statement.
Geopolitical concerns weakened the greenback as well.
Fighting between Iraqi security forces and Sunni insurgents continued on Thursday, while U.S. President Barack Obama said he stood ready to take "targeted and precise" action to control the violence, while reports that Iran is also ready to battle the insurgency sparked fears of a civil war.
Elsewhere, U.S. data beat expectations, which cushioned the greenback's losses.
In a report, the Federal Reserve Bank of Philadelphia said that its manufacturing index rose to an eight-month high of 17.8 in June from 15.4 in May. Analysts had expected the index to dip to 14.0 in June.
The data came after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 14 declined by 6,000 to 312,000 from the previous week’s revised total of 318,000. Analysts had expected jobless claims to fall by 4,000 to 314,000 last week.
The dollar was up against the yen, with USD/JPY up 0.05% and trading at 101.96, and down against the Swiss franc, with USD/CHF down 0.14% at 0.8946.
The Swiss National Bank kept its benchmark interest rate unchanged close to zero on Thursday and reaffirmed its commitment to the minimum exchange rate of CHF1.20 per euro.
The accompanying rate statement released after the announcement said that the Swiss franc is “still high.”
The SNB also said it would continue to enforce the minimum exchange rate of 1.20 per euro imposed in September of 2011, and reiterated that it is prepared to purchase foreign currency in “unlimited quantities” if necessary.
The greenback was down against the pound, with GBP/USD up 0.26% at 1.7037.
The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD down 0.12% at 1.0824, AUD/USD down 0.07% at 0.9400 and NZD/USD down 0.25% at 0.8711.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.11% at 80.41.