U.S. Dollar Lower Ahead Of Fed Decision

The U.S. dollar dropped against its major counterparts in the New York session on Thursday, as investors awaited the Federal Reserve's monetary policy announcement due shortly.

With the Fed widely expected to lower rates by 25 basis points, traders are likely to pay close attention to the accompanying statement for clues about the outlook for future rate cuts.

Ahead of the announcement, CME Group's FedWatch tool is indicating a 67.4 percent chance the Fed will cut rates by another 25 basis points in December but a 32.2 percent chance rates will be left unchanged.

On the U.S. economic front, a report released by the Labor Department showed a modest rebound by first-time claims for U.S. unemployment benefits in the week ended November 2nd.

The Labor Department said initial jobless claims crept up to 221,000, an increase of 3,000 from the previous week's revised level of 218,000.

Economists had expected jobless claims to rise to 221,000 from the 216,000 originally reported for the previous week.

The greenback fell to 1.0824 against the euro and 1.3009 against the pound, off its early highs of 1.0712 and 1.2868, respectively. The currency is seen finding support around 1.10 against the euro and 1.32 against the pound.

The greenback declined to 0.8709 against the franc and 152.84 against the yen, from its early more than 3-month highs of 0.8774 and 154.70, respectively. The next possible support for the currency is seen around 0.86 against the franc and 146.00 against the yen.

The greenback dropped to fresh 2-week lows of 0.6687 against the aussie and 0.6038 against the kiwi, from its early highs of 0.6563 and 0.5931, respectively. The currency is likely to locate support around 0.68 against the aussie and 0.62 against the kiwi.

The greenback reached as low as 1.3855 against the loonie. If the currency falls further, it is likely to test support around the 1.36 region.