The U.S. dollar drifted lower against its major counterparts in early European deals on Thursday, after the Fed raised interest rates by a quarter point, while downgrading rate hike projections for next year given uncertain global economic outlook.

Following a 2-day meeting on Wednesday, the Fed hiked interest rates by 25 basis points to a range of 2.25 percent to 2.5 percent.

The central bank projected two rate hikes in 2019, rather than three it had forecast in September.

The Fed statement noted that "some" further gradual rate hikes would be needed in the year ahead, a slight revision in language of the statement including the word "some."

The Fed officials suggested that risks to the economy "are roughly balanced," as they flagged threats from a softening global economic growth.

The FOMC "will continue to monitor global economic and financial developments and assess their implications for the economic outlook," according to the statement.

The greenback has been falling against its major counterparts in the Asian session.

The greenback declined to 1.1486 against the euro, its lowest since November 7. The greenback is seen finding support around the 1.16 region.

The greenback slipped to a 2-day low of 1.2705 against the pound, from Wednesday's closing value of 1.2611. The greenback is poised to find support around the 1.28 area.

Data from the Office for National Statistics showed that U.K. retail sales rose for the first time in three months in November to surpass economists' expectations.

The volume of retail sales including automotive fuel rose 1.4 percent from October, which was much faster than the 0.3 percent growth economists had predicted.

The U.S. currency slid to near a 2-month low of 111.67 against the yen, after rising to 112.60 at 8:00 pm ET. The next possible support for the greenback is seen around the 110.00 level.

The Bank of Japan left its ultra-loose monetary policy unchanged, asserting its pledge to keep interest rate extremely low for an extended period of time amid indications of global economic slowdown.

The board maintained interest rate at -0.1 percent on current accounts that financial institutions maintain at the bank.

The greenback that closed Wednesday's trading at 0.9945 against the franc weakened to a 9-day low of 0.9864. Next key support for the greenback is likely seen around the 0.97 level.

The greenback fell to 1.3447 against the loonie, 0.7146 against the aussie and 0.6789 against the kiwi, from its early high of 1.3504, 1-1/2-month high of 0.7086 and more than a 5-week high of 0.6725, respectively. If the greenback slides further, 1.32, 0.725 and 0.70 are likely seen as its next support levels against the loonie, the aussie and the kiwi, respectively.

Looking ahead, at 7:00 am ET, the Bank of England announces its decision on interest rate. Economists expect the bank to retain benchmark rate at 0.75 percent and asset purchase target at GBP 435 billion.

Canada wholesale sales for October, U.S. leading index for November and weekly jobless claims for the week ended December 15 will be out in the New York session.

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