Dollar continues decline after mixed U.S. data; Markets keep digesting Fed message

The dollar dipped after the FOMC statement as investors viewed the Fed statement and remarks by Chairwoman Janet Yellen with a dovish cast. The central bank also lowered its interest-rate projections for the coming years.

Despite the Fed’s reluctance to commit to rate hikes this year, Boris Schlossberg, managing director of FX strategy at BK Asset management, thinks that a rate hike before year-end remains likely, as the U.S. economy continues to outperform its rivals.

However, data released Thursday showed a mixed picture of the economy.

A fresh report showed that the number of those in the U.S. filing for initial jobless benefits in the week ending June 13 declined by 12,000 to a four-week low of 267,000 from the previous week’s total of 279,000. Analysts had expected initial jobless claims to fall by 2,000 to 275,000 last week.

Separately, data showed that U.S. consumer prices rose by 0.4% last month, missing forecasts for a rise of 0.5% and following a rise of 0.1% in April. Year-over-year, consumer prices were flat in May.

Consumer prices, which exclude food and energy costs, climbed by 0.1% in May, below expectations for a 0.2% rise.

EUR/USD gained 0.56% to trade at 1.1401.

GBP/USD rose 0.39% to settle at 1.5894.

In other European currency trading, the Norwegian krone was lower against the dollar after the Norges Bank, Norway’s central bank, cut its benchmark interest rate to 1%, from 1.25%. Officials said that further cuts are likely as it attempts to keep inflation close to its 2.5% target.

The krone traded at 7.71 to the greenback, declining from 7.65 to the dollar.