The dollar’s rally against the other main currencies paused on Thursday, with the greenback taking a breather, following initial strong gains in the wake of the Federal Reserve’s decision on Wednesday to start tapering its economic stimulus program.
USD/JPY was down 0.16% to 104.11 during European late morning trade after rising as high as 104.35 earlier, the highest level since October 2008.
The Federal Reserve announced Wednesday that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January. In his last press conference as Fed Chairman Ben Bernanke said the economy was continuing to make progress.
The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.
The euro was trading close to two week lows against the dollar, with EUR/USD falling to lows of 1.3650, the weakest since December 6. The pair was last down 0.02% to 1.3677.
The pound was fractionally lower against the dollar, with GBP/USD dipping 0.09% to 1.6374.
Sterling showed little reaction after official data on Thursday showed that U.K. retail sales increased by 0.3% last month and were 2% higher on a year-over-year basis. Economists had forecast a monthly gain of 0.3% and an annual increase of 2.3% .
Demand for the pound continued to be underpinned after data on Wednesday showed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low in the three months to October, fuelling hopes that the Bank of England will raise interest rates ahead of other central banks.
The dollar edged higher against the Swiss franc, with USD/CHF up 0.12% to 0.8949.
The greenback was trading near multi-year highs against the Australian and Canadian dollars, with AUD/USD edging up 0.06% to 0.8864 and USD/CAD up 0.22% to 1.0719.
The U.S. dollar was also higher against its New Zealand counterpart, with NZD/USD down 0.49% to 0.8188.
New Zealand’s dollar shrugged off data showing that the economy expanded by 1.4% in the third quarter, beating expectations for a 1.1% expansion, after an upwardly revised 0.3% increase in the three months to June.
The U.S. dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, edged up 0.05% to 80.66.
Please LIKE our Facebook page - it makes us stronger: