On Thursday the dollar was trading close to two-month lows against the euro after data indicated
that U.S. growth slowed steeply at the start of the year, adding to doubts
over the prospect of higher interest rates.
EUR/USD was at 1.1120, not far from Wednesday’s two-month peaks of 1.1187.
The greenback eased after data on Wednesday indicated that U.S. gross domestic product grew just 0.2% in the three months to March, slowing from 2.2% in the final quarter of 2014 - the slowest rate of growth in a year. Economists forecast a more moderate slowdown to 1.0%.
However, some losses were trimmed after the Federal Reserve’s rate
statement said that recent indications of a slowdown in growth were
probably due to “transitory factors.”
The regulator also gave no fresh indications on the possible timing of a first rate hike.
A day earlier, the euro received a boost as data showed that German consumer prices rose in April, easing concerns over the threat of deflation in the euro area.
Other reports showed that euro zone bank lending to the private sector ticked higher in March for the first time in three years and consumer inflation expectations rose for the first time this year, indicating that the recovery in the region is gaining traction.
The euro area was to release preliminary data on consumer prices later in the day.
USD/JPY hit one-month lows of 118.50 on Thursday after the Bank of Japan left monetary policy unchanged, before pulling back to 118.92, almost unchanged for the day.
