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The euro fell 0.3 percent against the dollar to $1.17 at around 7.13 a.m. London time. Bond markets were also nervous about the spending plans in Italy, with the yield on the 10-year government bond moving higher to about 2.968 percent.

Thanks to the euro’s slip, the dollar index against a basket of six major currencies stood 0.35 percent higher at 94.519.

The dollar was little changed at 112.685 yen, having slipped from a two-month peak of 113.145 touched on Wednesday.

The Federal Reserve is more optimistic on growth to the end of the year. The central bank sees U.S. gross domestic product to grow by 3.1% in 2018, up from June’s forecast of2.8%. Economic activity is projected to expand 2.5% in 2019, up a tick from June’s forecast of 2.4%. Expectations for growth in 2020 remained unchanged at 2.0%. In its first look at2021 the central bank expects the economy to grow 1.8%.

The committee sees the unemployment rate moving slightly higher this year. The media forecasts expect the unemployment rate to come in at 3.7% this year, up slightly from June’s projection of 3.6%. The rate is estimated to fall 3.5% next year, through to 2020, unchanged from June. The unemployment rate is expected to tick up to 3.7% by 2021.

Negative for gold though is that the central bank also forecasts tame inflation pressures throughout the year. With higher interest rates, this means that real interest rates will push higher. The projections show inflation rising 2.1% for this year and then falling to 2.0% next year before pushing back to 2.1% in 2020 and 2021.

Core inflation, which strips out volatile food and energy prices, is expected to reach 2.0%, unchanged from June’s projections. Inflation for the next three years is expected to remain at 2.1%, unchanged from the previous forecast.

·       EUR/USD Technical Analysis: EUR/USD rises and challenges 1.1800 figure post-FOMC

The US Federal Reserve Bank just raised rates by 25 bps matching consensus and EUR/USD jumped near 1.1800 figure.

EUR/USD main bear trend is switching to bullish as EUR/USD is trading above its 100-day simple moving average. The US Federal Reserve Bank raised rates by 25 bps matching consensus.

EUR/USD is trading near 1.1750. EUR/USD is trading well above its 50, 100 and 200-period simple moving averages. EUR/USD is also supported by the bull trendline (green). The RSI indicator is trading above 50 remaining constructive to the upside. Bulls targets are located near 1.1800 and 1.1853 (June 14 high).

Main trend:                    Bullish

Resistance :   1.1800, 1.1853, 1.1900

Support :   1.1750, 1.1723, 1.1654

·       U.S. President Donald Trump said he rejected Canadian Prime Minister Justin Trudeau’s request for a meeting during the UN General Assembly this week because bilateral North American Free Trade Agreement (NAFTA) talks are going poorly and the United States is unhappy with Canada’s negotiators.

·       U.S. President Donald Trump did not provide any evidence for his allegation accusing China of seeking to meddle in the Nov. 6 U.S. congressional elections.

China's top diplomat, Wang Yi, immediately rejected the allegation, "We did not and will not interfere in any country's domestic affairs. We refuse to accept any unwarranted accusations against China".

Trump's focus on China came as a surprise during a formal meeting around the Security Council's horseshoe table that was expected to concentrate on the spread of nuclear, chemical and biological weapons.

·       President Donald Trump on Wednesday said he could withdraw his support for Brett Kavanaugh depending on the testimony in a high-profile Thursday hearing into multiple accusations of sexual misconduct against the Supreme Court nominee.

·       U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed on Wednesday to start trade talks in an arrangement that, for now, protects Japanese automakers from further tariffs, seen as a major threat to the export-dependent economy.

Trump has made clear he is unhappy with Japan’s $69 billion trade surplus with the United States - nearly two-thirds of it from auto exports - and wants a two-way agreement to address it.

·       China’s central bank left short-term rates unchanged on Thursday, choosing not to follow a benchmark interest rate rise by the U.S. Federal Reserve despite the risk that it could that it could put renewed pressure on the yuan.

The interest rate for seven-day reverse repurchase agreements stood at 2.55 percent in the last cash injection on Sept.20, while market rates CN7DRP=CFXS largely swung in a range of 2.55 to 2.7 percent in recent months.

The PBOC has not changed benchmark one-year lending or deposit rate since October 2015.

The yuan was little changed after the Fed and PBOC decision.

·       Profit growth for China’s industrial firms decelerated to a five-month low in August on shrinking revenues and prices, adding to concerns about demand in the world’s second-largest economy amid escalating trade frictions with the United States.

Industrial profits rose 9.2 percent to 519.69 billion yuan in August, softening for a fourth straight month and almost halving from a 16.2 percent gain in July, data from the National Bureau of Statistics (NBS) showed on Thursday.