Investing.com - The dollar traded lower against a basket of major currencies on Thursday, after the Federal Reserve failed to adopt a more aggressive outlook concerning the pace of rate hikes this year.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, dipped 0.14% to 101.22 by 11:46 EDT.
The Federal Reserve on Wednesday, raised interest rates by 0.25% to a target range of 0.75% to 1% but kept its previous forecast of three rate increases this year unchanged, which disappointed investors, who expected four rate hikes in 2017.
The dollar continued its move lower in the mid-afternoon session, after a mixed batch of economic data failed to halt the slide, as the greenback slumped to a five-week low.
Weekly initial jobless claims fell to 241,000. Housing starts rose to a seasonally adjusted annual rate of 1.288 million in February while the Philadelphia Fed Index topped forecasts at 32.8 for March. Both the Philadelphia Fed Index and the housing starts beat forecasts.
The pound traded sharply higher against the dollar, hitting a two week high of $1.2373, after the Bank of England left interest rates unchanged but hinted that a rate hike could be in the pipeline.
GBP/USD gained 0.60% to $1.2366 while EUR/USD traded above break even at $1.0379. Demand for the single currency soared, as far-right leader Geert Wilders was defeated in the Dutch parliamentary elections.
Meanwhile, the dollar fell to a two-week low against the yen with USD/JPY 0.25% lower at 113.12.
Elsewhere, the dollar bucked the trend lower against its Canadian counterpart, as USD/CAD gained 0.13% to $1.3323.