Dollar dips on Fed minutes, shrugs off solid jobless claims report

The dollar weakened against most major currencies on Thursday as investors continued to avoid the greenback after the minutes from the Federal Reserve's March policy meeting revealed monetary authorities are concerned with soft consumer prices.

In U.S. trading on Thursday, EUR/USD was up 0.27% at 1.3893.

The Federal Reserve Board of Governors unanimously voted to scrap a threshold that would hike interest rates once the unemployment rate hits 6.5%, according to the minutes of the Fed's March policy meeting released on Wednesday, a sign monetary authorities are growing concerned over low inflation rates.

In the past, the Fed had indicated rates were set to rise when the unemployment rate hits 6.5% provided that figure accompanied a 2.5% inflation rate.

Today, the headline unemployment rate stands at 6.7%, not far from the previous threshold, though labor markets remain slack and inflation remains well below 2.5%.

The Federal Reserve's decision to do away with its rate-hike threshold left markets convinced that interest rates will remain low for some time to come, even after the U.S. central bank winds down monetary stimulus programs.

Low borrowing costs weaken the dollar.

The minutes also indicated general concerns among monetary authorities over persistently low inflation rates.

'In light of their concerns about the possible persistence of low inflation, members agreed that inflation developments should be monitored carefully,' the Fed minutes said.

Elsewhere on Thursday, the Labor Department reported that the number of individuals filing for initial jobless benefits in the week ending April 4 fell by 30,000 to 300,000, the lowest since May of 2007, from the previous week’s upwardly revised total of 332,000.

Analysts had expected jobless claims to decline to 320,000, though the numbers did little to boost the dollar.

Meanwhile in the euro zone, Greece made a successful return to the financial markets on Thursday, raising €3 billion in its first bond auction since 2010, when Athens sought its first bailout.

The dollar was down against the yen, with USD/JPYY down 0.55% at 101.43, and down against the Swiss franc, with USD/CHF down 0.43% at 0.8758.

The greenback was up against the pound, with GBP/USD down 0.02% at 1.6790.

The Bank of England left the benchmark interest rate unchanged at 0.50% earlier Thursday, in a widely anticipated move.

The dollar was mixed against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.39% at 1.0923, AUD/USD up 0.37% at 0.9425 and NZD/USD down 0.20% at 0.8697.

The Aussie rise official data released earlier revealed that the number of employed people in Australia rose by 18,100 in March, exceeding expectations for a 5,000 rise.

Australia's unemployment rate ticked down to 5.8% last month, from 6.1% in February.

The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.20% at 79.44.

On Friday, the U.S. is to round up the week with data on producer price inflation and the preliminary report on the University of Michigan’s consumer sentiment index.