2017.01.0502:35:00UTC+00U.S. Dollar Weakens After Fed Minutes

The U.S. dollar declined against its major counterparts in the late Asian session on Thursday, in response to the minutes from the Federal Reserve's latest policy meeting that signaled heightened uncertainty stemming from the prospect of tax reform and fiscal stimulus under upcoming Trump's administration.

The minutes from the December 13-14 meeting showed that Fed officials grappled with "considerable uncertainty" about President-elect Donald Trump's policies and the effect they would have on the economy when they met last month.

Members agreed that there was heightened uncertainty about possible changes in fiscal and other economic policies as well as their effects, the minutes showed.

At the December meeting, the FOMC raised interest rates by a quarter-percentage point to 0.50%-0.75% and predicted two or three additional rate hikes in 2017.

Investors await ADP private sector payrolls data for December due later in the day, which is seen as prelude to U.S. jobs data to be published on Friday.

The dollar was also weighed by rising risk appetite, as most Asian stocks rose after a private survey showed growth in China's services sector accelerated to a 17-month high in December.

The greenback weakened on Wednesday. It lost 0.4 percent against the yen, 0.7 percent against the franc, 0.8 percent against the euro and 0.7 percent against the pound for the day.

The greenback fell to a 6-day low of 1.0574 against the euro, compared to Wednesday's closing value of 1.0486. If the greenback extends slide, 1.075 is possibly seen as its next support level.

The greenback weakened to 115.58 versus the yen, its lowest since December 14. The greenback is seen finding support around the 113.00 region.

The latest survey from Nikkei showed that Japanese service sector activity continued to expand at a faster rate in December, with a PMI score of 52.3.

That's up from 51.8 in November, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction.

The greenback dropped to 6-day lows of 1.0151 against the Swiss franc and 1.2362 against the pound, from its early highs of 1.0218 and 1.2314, respectively. On the downside, the greenback may challenge support around 1.00 against the franc and 1.26 against the pound.

The greenback slid to a new 3-week low of 1.3255 versus the loonie, near 3-week lows of 0.7028 versus the kiwi and 0.7330 versus the aussie, off its previous highs of 1.3312, 0.6955 and 0.7273, respectively. The next possible support for the greenback may be found around 1.30 against the loonie, 0.73 against the kiwi and 0.76 against the aussie.

Looking ahead, Swiss consumer price inflation and U.K. services PMI for December, as well as Eurozone producer price index for November are due in the European session.

At 8:15 am ET, ADP private sector employment data for December is set for release.

In the New York session, Canada industrial product price index for November, U.S. weekly jobless claims for the week ended December 24, ISM non-manufacturing composite index and Markit's final services PMI for December will be released.