The dollar index slipped on Thursday, the day after a hawkish statement from the US Federal Reserve pushed the greenback up sharply against other major currencies. The dollar briefly rallied on Thursday after the release of US gross domestic product figures that fell short of economists' expectations, but those gains were short-lived.
After the Fed's statement on Wednesday, the dollar index rose to its highest since early August. The statement put a December rate increase firmly in play and rebutted earlier speculation that China's cooling economy would delay this move. The economy grew 1.5 percent in the third quarter, just missing the 1.6 percent estimate from economists in a Reuters poll. Consumption was strong, with consumer spending up 3.2 percent and advance sales growing by 3 percent. A drawdown in inventories weighed on the overall figure.
"I think that the number, while weak, may not be meaningfully weak enough to reduce the risk of a Fed rate hike in December," said Omer Eisner, chief market analyst at Commonwealth Foreign Exchange Inc. He added that the November 6 release of job growth figures would be more important for markets. The dollar index, which measures the greenback against six major currencies, was down 0.36 percent at 97.426. The euro was stronger against the dollar, rising to $1.0968, after falling on Wednesday to its lowest since August. The dollar was flat against the Japanese yen at 121.09.