The dollar in relation to a basket of six major currencies is close to the maximum of 2.5 months due to the Fed hint at the possibility of raising interest rates in December and expectations of further policy easing by the European Central Bank.
The dollar index went down 0.22 % to 97.654, before reaching the maximum mark since August 10 at 97.818. It decreased against the yen by 0.23 % to 120.78 yen.
The US Federal Reserve on Wednesday kept its benchmark interest rate in the range of 0.00-0.25 % per annum, but in a statement following the meeting, Committee on open markets referred to the next meeting to be held in December, which was a surprise to observers.
"When making the decision to raise the target range (key rate) at the next meeting, the Committee will assess the progress, both real and anticipated, in the performance of tasks to achieve maximum employment and 2 % inflation," - is said in the statement.
After that, the futures market of interest rates revised the likelihood of an increase in December to 50 % from 30 % prior to the meeting.
"The Fed statement can be interpreted in different ways, but those who are waiting for a rate hike in December, may find this statement as a preparation to increase," - said the chief strategist at Sumitomo Mitsui Bank, Daisuke Uno.
According to economists, the PMI of US manufacturing sector in October, which will be published on Monday, will show the first in 2.5 years reduction of industrial activity. Such a result will not increase interest rates in the near future.
The euro rose 0.16 % to $ 1.0937, while it fell against the yen by 0.15 % to 132.05 yen. The euro fell against the dollar by 3.7 % since the chairman of the European Central Bank, Mario Draghi, made it clear a week ago that the central bank is ready to increase its program of acquiring assets and lower interest rates.
Growth in industrial production in Japan reduces the probability of additional stimulus measures at the Bank of Japan meeting on Friday.