Investing.com - The dollar extended losses against the other major currencies on Thursday, as the Federal Reserve’s decision to leave interest rates unchanged at the conclusion of its policy meeting on Wednesday continued to dampen demand for the greenback.
In addition, the Fed cut the number of rate increases it expects this year to one from two and projected a less aggressive rise in interest rates next year and in 2018.
However, the U.S. central bank signaled that it could tighten monetary policy before the end of the year if the job market continued to improve.
Markets shrugged off a report by the U.S. Department of Labor showing that initial jobless claims in the week ending September 17 decreased by 8,000 to 252,000 from the previous week’s total of 260,000. This was its lowest level since July.
Analysts had expected jobless claims to rise by 2,000 to 262,000 last week.
A separate report showed that U.S. existing home sales decreased by 0.9% in August to 5.33 million units from the 5.38 million units in July. The consensus forecast was for a 1.1% advance to 5.45 million units.
USD/JPY climbed 0.50% to 101.81, off a one-month low of 100.10 hit overnight.
Markets were still digesting the Bank of Japan’s decision to refrain from cutting interest rates further into negative territory or expanding its asset purchase program on Wednesday, instead switching to targeting interest rates as a way to reach its inflation target.
EUR/USD gained 0.51% to 1.1247, the highest since September 16, while GBP/USD advanced 0.63% to 1.3115.
The Swiss franc was also higher, with USD/CHF declining 0.74% to 0.9666.
The Australian dollar remained stronger, with AUD/USD up 0.35% at 0.7653, while NZD/USD slid 0.30% to 0.7318.
In a widely expected move, the Reserve Bank of New Zealand left its benchamark interest rate unchanged at 2.00% earlier, but said that further rate cuts would be needed to boost inflation.
"Our current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range," RBNZ Governor Graeme Wheeler said.
Elsewhere, USD/CAD dropped 0.56% to trade at 1.3028, the lowest since September 13.
The commodity-related loonie was boosted by a surge in oil prices on Thursday, after data showed U.S. crude supplies fell for the third week in a row.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.42% at 95.06, the lowest since September 12.