Investing.com - The euro hit 2017 highs against the broadly weaker U.S. dollar on Thursday after the Federal Reserve’s latest policy statement offered no hint on when it may hike interest rates again.
EUR/USD touched highs of 1.0819, the strongest level since December 8 and was last at 1.0806, up 0.36% for the day.
In its latest monetary policy statement, the Fed stuck to its view that the economy is strengthening and policymakers also see economic growth continuing.
But the Fed gave no clear signal on the timing of its next rate hike as officials wait to assess the possible economic impact of the Trump administration’s protectionist policies and recent remarks about currencies.
The euro surged on Tuesday after President Trump’s top trade adviser accused Germany of currency exploitation, saying it is using a “grossly undervalued” euro to exploit the U.S. and its trading partners.
In separate remarks, Trump criticized Japan and China, saying they devalued their currencies to the disadvantage of the U.S.
The remarks indicated that the dollar exchange rate could have a prominent role to play in Trump's 'America First' agenda.
The dovish Fed statement hit sentiment on the greenback despite a raft of solid U.S. economic data being released on Wednesday.
The Institute for Supply Management reported that its index of manufacturers rose to more than two-year highs in January and the ADP nonfarm payrolls report showed that the private sector boosted hiring last month.
In the euro zone, the European Central Bank said Thursday that it will look through the recent spoke in inflation and keep its stimulus program in place as underlying inflation remains sluggish.
The ECB said in its economic bulletin that very substantial monetary accommodation was needed to bring back inflation to its target of close to but just below 2% and keep it there.
The euro was also higher against the pound, with EUR/GBP up 0.45% to 0.8545 as investors awaited the Bank of England’s quarterly inflation report and interest rate decision later in the day.