Forexpros – The U.S. dollar was lower against all of its major counterparts on Thursday, after the Federal Reserve indicated that it would keep interest rates close to zero for at least another two years, dampening demand for the greenback.
During European morning trade, the dollar was down against the euro, with EUR/USD rising 0.24% to hit 1.3139.
At the conclusion of Wednesday’s policy-setting meeting, the Fed said economic conditions will likely “warrant exceptionally low levels for the federal funds rate at least through late 2014.”
The central bank had previously pledged to keep interest rates close to zero until mid-2013.
Fed Chairman Ben Bernanke said that policy makers were “prepared to provide further monetary accommodation” and added that bond buying is “an option that’s certainly on the table,” indicating that the bank may embark on a third round of quantitative easing.
In the euro zone, talks on a debt swap deal between Greece and its creditors were to resume in Athens later in the day.
Meanwhile, Italy was to auction as much as EUR5 billion of short term government debt, ahead of an auction of long term debt on Monday.
The greenback was also lower against the pound, with GBP/USD adding 0.25% to hit 1.5697.
In addition, the greenback was weaker against the yen and the Swiss franc, with USD/JPY sliding 0.23% to hit 77.60 and USD/CHF shedding 0.30% to hit 0.9184.
Elsewhere, the greenback was down against its Canadian, Australian and New Zealand cousins, with USD/CAD dropping 0.42% to hit 1.0001, AUD/USD advancing 0.65% to hit 1.0666 and NZD/USD gaining 0.55% to hit 0.8212.
Earlier Thursday, the Reserve Bank of New Zealand left its benchmark interest rate unchanged at 2.5% in line with expectations. RBNZ Governor Alan Bollard said it was prudent to hold rates steady amid the present uncertainty over the global economic outlook.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.04% to hit 79.56.
Later in the day, the U.S. was to release official data on initial jobless claims and durable goods orders.
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