Investing.com - The dollar was broadly higher against the other main currencies on Thursday, after the Federal Reserve tapered stimulus, while a renewed selloff in emerging markets heightened risk aversion.
EUR/USD hit 1.3598, the lowest since January 23 and was last down 0.42% to 1.3606.
The Federal Reserve rolled back its bond purchasing program by another $10 billion to $65 billion-per-month at its policy meeting on Wednesday, in a widely anticipated decision.
The Fed said growth signals are encouraging, and the unemployment market shows improvement "on balance".
Fears over emerging markets continued to weigh on risk appetite after rate hikes by central banks in Turkey and South Africa failed to prop up their currencies. Emerging market economies are vulnerable to reductions in Fed stimulus, as they rely on foreign investment to plug their current account gaps.
Market sentiment was also hit by renewed fears over a slowdown in China after revised data on Thursday showed that China’s HSBC manufacturing index ticked down to a six-month low of 49.5 this month, below the preliminary estimate for 49.6.
The euro shrugged off data showing that the number of unemployed people in Germany fell by 28,000 in December, outstripping expectations for a decline of 5,000. The German unemployment rate was steady at 6.8%.
Elsewhere, USD/JPY dipped 0.06% to 102.20 after edging up to session highs of 102.54 earlier.
The pound was lower against the dollar, with GBP/USD falling 0.41% to 1.6495. The dollar gained ground against the Swiss franc, with USD/CHF advancing 0.49% to 0.8988.
The New Zealand dollar fell to one month lows, with NZD/USD down 0.60% to 0.8158. The drop in the kiwi came after the Reserve Bank of New Zealand left rates on hold on Wednesday, disappointing some market expectations for a rate hike.
The RBNZ left the cash rate unchanged at a record low of 2.5%, but said the country’s "economic expansion has considerable momentum" and added that a return of interest rates to more normal levels can be expected "soon."
The Australian dollar edged higher, with AUD/USD easing up 0.14% to 0.8751, up from lows of 0.8711.
The Canadian dollar steady at four-and-a-half-year lows against the U.S. dollar, with USD/CAD edging up 0.08% to 1.1176.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.35% to 80.90.