Investing.com - The dollar slumped to session lows against a basket of other major currencies on Thursday after the minutes of the Federal Reserve’s latest meeting gave no clear indication on the timing of an initial interest rate increase.
The US dollar index, which tracks the greenback against a basket of six major rivals, was down 0.43% to 96.01, after ending the previous session down 0.7%.
Wednesday’s minutes showed that Fed officials believe the economy is nearing the point where interest rates should move higher, but noted that the subdued inflation outlook and weakness in the global economy could still pose risks to the U.S. economic outlook.
Data on Thursday showed that the number of Americans who filed for unemployment assistance rose by 4,000 to a seasonally adjusted 277,000 last week, holding close to levels indicative of a strong labor market.
Separate reports showed that existing home sales rose to the highest level in eight years in July, while manufacturing activity in the Philadelphia region grew at a faster than expected rate this month.
EUR/USD advanced 0.67% to 1.1192, after ending Wednesday’s session with gains of 0.89%.
The dollar fell to fresh three-week lows against the yen and hit two-week lows against the Swiss franc.
The pound pared back early losses, with GBP/USD at 1.5671, holding below Tuesday’s seven-week peaks of 1.5716.
Sterling softened after data earlier on Thursday showing that UK retail sales rose less than expected in July sparked concerns over the outlook for consumer demand.
Demand for the pound continued to be underpinned by expectations for a rate hike by the Bank of England in the coming months.
The commodity linked currencies regained some ground as the dollar eased, but gains were held in check as low oil prices and ongoing concerns over slowing growth in China curbed demand for riskier assets.
USD/CAD was down 0.22% to 1.3098, while NZD/USD rose to 0.6625.
The Australian dollar was at 0.7345, off lows of 0.7285 hit as falls in Chinese stocks overnight pressured the currency lower.