The U.S. dollar climbed against most major counterparts in early European deals on Thursday, as the Federal Reserve stuck to its plan for raising the interest rate again later this year and decided to begin the reduction of balance sheet from October.

The U.S. Federal Reserve left interest rates unchanged at a range of 1 percent to 1.25 percent.

As expected, the Fed announced that it would begin shrinking its $4.5 trillion balance sheet starting October, but said the process would be gradual and predictable, initially allowing $10 billion in bonds to roll off each month.

The Fed maintained projections for another rate hike by the end of the year and three additional hikes in 2018, brushing aside concerns over the impact of subdued inflation and recent hurricanes.

"We anticipate that core and headline inflation will move up close to our 2 percent objective next year...the shortfall this year is due to transitory factors that are likely to disappear over the course of the coming year," Fed Chair Janet Yellen said at a press conference.

The currency has been trading in a positive territory in the Asian session, with the exception of the pound.

The greenback rose to 1.3483 against the pound, after having fallen to 1.3514 at 2:30 am ET. On the upside, 1.32 is likely seen as the next resistance level for the greenback.

The greenback advanced to more than a 2-month high of 112.72 versus the yen and more than a 5-week high of 0.9743 against the Swiss franc, from Wednesday's closing values of 112.21 and 0.9698, respectively. The next possible resistance for the greenback is seen around 114.00 against the yen and 0.99 against the franc.

The greenback firmed to a 3-day high of 0.7946 against the aussie and a 2-day high of 0.7299 against the kiwi, off its early lows of 0.8036 and 0.7364, respectively. If the greenback rises further, 0.77 and 0.71 are likely seen as its next resistance levels against the aussie and the kiwi, respectively.

On the flip side, the greenback fell to 1.1914 against the euro, from a high of 1.1866 hit at 7:45 pm ET. The greenback is likely to challenge support around the 1.21 area.

Looking ahead, Canada wholesale sales for July, Eurozone flash consumer sentiment for September, U.S. weekly jobless claims for the week ended September 16, house price index for July and leading indicators for August are set for release in the New York session.

At 9:30 am ET, the European Central Bank President Mario Draghi speaks at the European Systemic Risk Board annual conference, in Frankfurt.

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