Investing.com - The dollar was steady against the other major currencies on Friday, but was on course for a weekly loss after the Federal Reserve cut its long range interest rate forecast and the Bank of Japan rebooted its monetary policy framework.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 95.36, but was down 0.76% for the week to date.
The Fed left rates on hold on Wednesday and hinted at one interest rate increase this year, but projected a less aggressive increase in rates next year and in 2018.
Expectations of higher interest rates typically boost the dollar by making it more attractive to yield seeking investors.
The euro was slightly higher, with EUR/USD rising 0.17% to 1.1225.
In the euro zone, data on Friday showed that business activity expanded at the slowest rate since the start of 2015 this month.
The data came as two senior European Central Bank officials said the bank had hoped the euro zone economy would respond better to its stimulus measures.
The dollar was subdued against the yen, with USD/JPY at 100.7.
The BoJ rebooted its monetary policy framework on Wednesday, amid skepticism over whether it will be enough to spur inflation.
The BoJ refrained from cutting interest rates further into negative territory or expanding its asset purchase program at its monetary policy meeting, instead switching to targeting interest rates as a way to reach its inflation target.
Sterling was sharply lower, with GBP/USD down 0.83% to 1.2965.
Meanwhile, the Canadian dollar weakened in the wake of disappointing domestic data on inflation and retail sales.
USD/CAD rose 0.71% to 1.3134.
Statistics Canada reported that the annual rate of inflation slowed to 1.1% in August from 1.3% In July.
A separate report showed that Canadian retail sales unexpectedly fell 0.1% in July.