Investing.com - The euro fell to fresh two-week lows against the stronger dollar on Thursday, extending losses from the previous session amid expectations for an earlier-than-expected rate hike by the Federal Reserve.
EUR/USD was down 0.44% to 1.3770, from Wednesday’s close of 1.3815. The euro fell more than 0.8% against the dollar on Wednesday.
The pair was likely to find support at 1.3725 and resistance at 1.3815.
At the conclusion of its two-day policy setting meeting on Wednesday, the Fed said it would reduce its monthly bond purchases by an additional $10 billion to $55 billion.
The dollar rallied after Fed Chair Janet Yellen indicated that the bank could begin to raise interest rates about six months after the bond-buying program winds up, which is expected to happen this fall. The comments prompted investors to bring forward expectations for a rate hike to as soon as April of next year.
However, the Fed statement also emphasized that economic conditions could mean that rates would remain on hold at record lows for some time, even after inflation and employment return to their longer-run trends.
The central bank also updated its forward guidance, discarding the 6.5% unemployment threshold for considering when to increase borrowing costs and said it will look at a wide range of information.
The common currency was also weaker against the yen and the pound, with EUR/JPY down 0.37% to 140.99, and EUR/GBP shedding 0.36% to trade at 0.8333.
Elsewhere, the euro was trading at two-week highs against the Swiss franc, with EUR/CHF up 0.14% to 1.2201.
The Swiss franc slipped after the Swiss National Bank left rates on hold on Thursday, and reiterated it would enforce the 1.20 per euro minimum exchange rate floor with unlimited interventions if necessary.
The SNB put the exchange rate cap in place in September 2011 after the franc almost reached parity with the euro, amid concerns over the impact of a strong franc on the Swiss economy, and in particular on exports.