Investing.com - The dollar fell to three-week lows against a basket of other major currencies on Thursday after the Federal Reserve indicated that it isn’t going to raise interest rates for a long period of time.
The dollar weakened broadly after the Fed gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.
The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.
The Fed acknowledged the recent increases in inflation and drop in unemployment, but Chair Janet Yellen said no formula was in place for when interest rates would start to rise.
USD/JPY eased 0.09% to 101.82, off the one-week high of 102.14 reached Wednesday ahead of the Fed announcement.
GBP/USD touched highs of 1.7034, the most since August 2009, and was last at 1.7031. Sterling shrugged off data showing that U.K. retail sales fell in May, declining for the first time since January.
U.K. retail sales decreased by 0.5% last month, in line with forecasts, official data showed, and were 3.9% higher on a year-over-year basis. The data did little to alter expectations that the Bank of England will raise interest rates sooner than other central banks.
EUR/USD was up 0.18% to 1.3617, from 1.3543 late Wednesday.
Elsewhere, USD/CHF lost 0.27% to trade at 0.8933. The Swiss National Bank kept its benchmark interest rate unchanged close to zero on Thursday and reaffirmed its commitment to the minimum exchange rate of CHF1.20 per euro.
The accompanying rate statement released after the announcement said that the Swiss franc is “still high.”
The SNB also said it would continue to enforce the minimum exchange rate of 1.20 per euro imposed in September 2011, and reiterated that it is prepared to purchase foreign currency in “unlimited quantities” if necessary.
AUD/USD was steady at 0.9408, while NZD/USD was down 0.14% to 0.8720 and USD/CAD dipped 0.10% to 1.0827.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.20% to 80.34, not far from lows of 80.24, the weakest level since May 27.