Forex – Dollar Index Turns Lower in Cautious Trade

Dollar erases earlier gains as focus turns to NFP report – The U.S. dollar turned lower against other major currencies on Thursday, as investors became more cautious ahead of Friday’s highly-anticipated employment data.

The greenback briefly rebounded after the Federal Reserve, at the conclusion of its policy meeting on Wednesday, signaled its confidence about inflation and growth in the U.S.

The Fed said that inflation is , boosting expectations for further interest rate hikes under incoming central bank head Jerome Powell.

The Fed left rates on Wednesday, in widely expected move. The meeting was current Fed chair Janet Yellen’s last.

The decision came after ADP payrolls processing firm reported that the U.S. private sector created in January, beating expectations for a 186,000 rise.

Market participants were now looking ahead to Friday’s for further indications on the strength of the economy.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.12% at 88.84 by 05:15 a.m. ET (09:15 GMT).

The euro and the pound moved higher, with up 0.28% at 1.2448 and with gaining 0.42% to 1.4247.

Earlier Thursday, data showed that UK manufacturing activity in January.

The yen and the Swiss franc remained weaker, with up 0.40% at 109.63 and with adding 0.11% to 0.9318.

Elsewhere, declined 0.50% to 0.8015, while edged 0.15% lower to 0.7352.

Meanwhile, eased 0.08% to 1.2305.

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