WASHINGTON (dpa-AFX) - The U.S. dollar, which exhibited weakness ahead of the Federal Reserve's monetary policy statement, rebounded after the Fed held the interest rate unchanged and explained its outlook for the economy.
The dollar index dropped to a low of 97.15 early on in the session, but rallied to 97.73 after the Federal Reserve Chairman Jerome Powell continued to project a patient approach to setting its benchmark interest rate and gave no indication that a cut was any more likely than an increase at this moment.
'We do think that our policy stance is appropriate right now, we don't see a strong case for moving in either direction,' he said.
Earlier in the day, a report released by payroll processor ADP showed private sector employment surged up by 275,000 jobs in April after climbing by an upwardly revised 151,000 jobs in March.
Economists had expected employment to increase by about 180,000 jobs compared to the addition of 129,000 jobs originally reported for the previous month.
Meanwhile, growth in U.S. manufacturing activity slowed much more than expected in the month of April, according to a report released by the Institute for Supply Management this morning, with activity expanding at its slowest pace in well over two years.
The ISM said its purchasing managers index slid to 52.8 in April after unexpectedly climbing to 55.3 in March, hitting its lowest level since October of 2016.
A report released by the Commerce Department said construction spending slumped by 0.9% to an annual rate of $1.282 trillion in March after climbing by 0.7% to a revised rate of $1.293 trillion in February. Economists had expected spending to inch up by 0.1%.
Against British Pound Sterling, the dollar was down 0.08% at 1.3045, recovering from a low of 1.3103 a pound.
In economic news, UK mortgage approvals for house purchase fell to its lowest level in over a year in March and consumer credit growth was the weakest in nearly five-and-a-half years as the original Brexit deadline approached, figures from the Bank of England showed on Wednesday.
In contrast, data released last week by UK Finance had shown that mortgage approvals hit a nine-month high in March.
UK house prices rose at the fastest annual pace in five months in April, but inflation remained subdued, survey data from the Nationwide housing society showed on Wednesday.
The house price index rose 0.9% year-on-year following a 0.7% increase in March. Economists had expected the inflation rate to remain unchanged.
Net mortgage lending grew to GBP 4.1 billion in March versus GBP 3.3 billion in February. Economists had forecast GBP 3.5 billion lending.
A survey report from IHS Markit showed UK manufacturing expansion slowed to a two-month low in April amid a decline in export business and an easing in the robust pace of stock-building.
The IHS Markit/CIPS Purchasing Managers' Index, or PMI, fell to 53.1 in April from March's 13-month high of 55.1. The score was in line with economists' expectations.
The euro was down by about 0.2% at $1.1194, drifting down from $1.1266 a unit.
The Japanese Yen was little changed in late afternoon trades, after having strengthened to 111.06 a dollar earlier in the session before falling to a low of 111.61.
The dollar was up nearly 0.5% against the Aussie with the pair trading at 0.7014. Against the loonie, the greenback was up 0.4% at 1.3444, and against Swiss Franc, it was down 0.14% at 1.0179.
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