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• The dollar held steady against a basket of major currencies on Thursday after the Federal Reserve signalled its confidence about inflation and growth in the world’s biggest economy, reinforcing views it will raise rates several more times this year.

Traders are now awaiting a host of indicators including non-farm payrolls to see if they offer more than a brief respite to the ailing dollar.

“The Fed’s message was a little hawkish, but dollar reaction was limited as such a stance did not come as too much of a surprise,” said Shin Kadota, senior strategist at Barclays in Tokyo.

“The heavy selling we saw on the dollar is beginning to run its course, but upbeat U.S. data would be needed for the currency to rebound further,” Kadota said.

The dollar index against a basket of six major currencies was steady at 89.127 having crawled back from a three-year trough of 88.438 set last week. The index fell 3.2 percent in January.

The dollar edged up 0.2 percent to 109.36 yen, edging away from a four-month low of 108.280 plumbed on Friday.

The euro last changed hands at $1.2417, having pulled away from a high of $1.2475 touched the previous day.

• The U.S. 10-year Treasury yield briefly rose to around 2.75 percent following the release of the Fed statement and remained around its highest in nearly eight years. The two-year yield initially traded near 2.16 percent, around its highest in almost a decade, before edging down to 2.14percent.

• The Federal Reserve will announce its decision on monetary policy at 19:00 GMT. There won’t be a press conference. The minutes will be released in three weeks (February 14) and the next meeting will be March 20/21 (will include new projections and press conference).

According to the CME Group Fed Watch Tool, the odds of a rate hike today are below 5% and rise to 75% for a hike in March.

Economic data continue to points to a strong US economy particularly the labour market. Today’s ADP report showed that the private sector added 234K jobs in January “Given the strong January job gain, 2018 is on track to be the eighth consecutive year in which the economy creates over 2 million jobs. If it falls short, it is likely because businesses can’t find workers to fill all the open job positions”, said Mark Zandi, chief economist of Moody’s Analytics. Jobs and growth continue to be main supporters of Fed’s normalization, as inflation remains subdued.

• Janet Yellen's final days as head of the Federal Reserve are at hand.

The Federal Open Market Committee, which sets monetary policy for the U.S. central bank, decided this week to select Jerome Powell as its new chairman effective Saturday. He will be officially sworn in Monday.

• "We believe that the Fed may be forced to raise rates more rapidly than the market is currently anticipating due to accelerating economic conditions and a heating of the economy," John Roberts, director of research at Hilliard Lyons, wrote in response to the survey. "That could lead to a pullback in equity markets when combined with rising rates that make fixed-income instruments more competitive with equities."

• The Federal Reserve likely remains on track to raise interest rates at least two times this year.

Markets were pricing in a more than 90 percent chance of an interest rate rise in March, and another 1.75 hikes by the end of the year, according to Bank of America and Jefferies. That was essentially unchanged from before the Fed released its statement.

"Still somewhere between two and three [rate hikes this year] is what people are expecting," said Ian Winer, head of equities at Wedbush. The Fed "sounds ever so slightly hawkish but in general it's kind of the same deal."

Some traders predict the Fed may raise interest rates more than three times this year.

"As expected, the Fed is more optimistic on economic growth and is more confident that inflation is going to rise to their 2 percent target," Bryce Doty, senior vice president of Sit Fixed Income Advisors, said in a note. "We continue to expect four rate increases in 2018."

• China's prime minister promised Wednesday to increase its trade with the U.K. during Theresa May's visit to the country at a time of economic uncertainty in Britain amid Brexit negotiations.

Following meetings between the U.K. and Chinese premiers and officials, Li Keqiang told a press conference that both countries were "committed to upholding to free trade and pushing forward economic globalization, and in the process promoting free trade."

• Prime Minister Theresa May has warned that European citizens arriving in Britain after Brexit next year may lose some rights, setting up a clash with the European Union over their treatment during any transition period.

The European Union has warned Britain that it must accept all decisions of the trading bloc and that its citizens should be able to secure full residence rights during the two-year transition period after it leaves the bloc.

But May has suggested EU citizens coming to Britain after March next year will be treated differently.

• Growth in China’s manufacturing sector remained elevated in January, a private business survey showed on Thursday, as new business led factories to raise output at the start of the year.

The reading suggested some resilience in the world’s second-largest economy at the start of 2018, though it stood in contrast with an official survey on Wednesday that pointed to a slight loss of momentum.

The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) was steady in January at 51.5, matching December’s reading, which was the highest in four months and above the 50-point mark that separates growth from contraction.

• A survey focused on small and mid-size manufacturing in China beat expectations on Thursday as factory output hit a 13-month high.

The Caixin/Markit manufacturing Purchasing Managers' Index for January came in at 51.5.

Economists polled by Reuters expected the private Caixin/Markit PMI to come in at 51.3 in January versus 51.5 in December.

A reading above 50 indicates expansion, while a reading below that signals contraction.

• China's economy surprised on the upside in 2017, but economists expect a managed slowdown this year to hit growth.

The Chinese government is cracking down on high debt levels and heavily polluting industries while engineering a transition toward a services and consumption-led economy.

"The manufacturing industry had a good start to 2018. Going forward, we should keep a close eye on the stability of the demand side," Zhong added in the press release.

• Asia’s factories got off to a strong start in 2018, with manufacturing activity in many countries gaining momentum and hitting multi-year highs as global demand for hi-tech products remained strong.

Business surveys in Europe and the United States later on Thursday were also expected to show solid factory activity, reinforcing expectations of another year of synchronized global growth that has propelled stock markets to record highs.

• Wall Street is looking for more economic growth this year, boosted by recently adopted tax cuts, but also more interest rate hikes from the Federal Reserve.

Respondents to the CNBC Fed Survey expect gross domestic product to rise 2.9 percent compared with last year, about half a point higher than the average forecast in the July survey. At the same time, forecasters lowered their 2019 outlook to 2.7 percent from 2.85 percent in the December survey.

The 40 respondents, including economists, fund managers and strategists, now see the funds rate ending 2018 at 2.24 percent, up about a quarter point from the prior survey. Next year, the rate is forecast to rise to 2.8 percent, also a quarter point higher.

• The head of the leading U.S. public health agency has resigned because of financial conflicts of interest that documents showed included purchases of tobacco and healthcare stocks while in office.

Dr. Brenda Fitzgerald, director of the U.S. Centers for Disease Control and Prevention, held “certain complex financial interests” that she could not sell in time, forcing her to recuse herself from many public health duties, a Department of Health and Human Services statement said on Wednesday.

• Oil prices are unlikely to advance much above $70 a barrel in 2018, with the market caught between the opposing forces of OPEC-led production cuts and surging U.S. output, a Reuters poll showed on Wednesday.

• U.S. oil prices extended modest gains on Thursday as OPEC’s strong compliance with a supply reduction pact offset news that U.S. production topped 10 million barrels per day for the first time in nearly half a century.

NYMEX crude for March delivery rose 14 cents, or 0.2 percent, to $64.87 a barrel by 0558 GMT, after ending the last session up 0.4 percent.

London Brent crude for April delivery was up 15 cents, or 0.2 percent, at $69.04, after settling up 3 cents in the previous session.

Reference: Reuters,CNBC