Investing.com - The dollar erased losses against against the other major currencies in quiet trade on Friday, as it recovered from the Federal Reserve's decision to hold interest rates this month.
EUR/USD dropped 0.52% to 1.1375, after rising to four-week highs of 1.1460 earlier in the session.
The dollar had weakened broadly after the Fed kept interest rates unchanged on Thursday, but losses were limited as the central bank left open the possibility of a rate hike later this year.
Speaking after the rate statement, Fed Chair Janet Yellen said global economic developments played a major part in the central bank's decision.
In deciding when to raise interest rates, the Fed repeated it wanted to see "some further improvement in the labor market" and be "reasonably confident" that inflation will increase.
The dollar was lower against the yen, with USD/JPY down 0.15% at 119.82.
Earlier Friday, the minutes of the Bank of Japan's August policy meeting revealed that the central bank must be vigilant to the risk of a decline in exports from a prolonged slowdown in China and other emerging economies.
Board members also said that the weakness in Japan's output and exports was temporary.
Elsewhere, the dollar was steady against the pound and the Swiss franc, with GBP/USD at 1.5595 and with USD/CHF at 0.9597.
The Australian and New Zealand dollars were stronger, with AUD/USD up 0.63% at 0.7220 and with NZD/USD advancing 0.91% to 0.6405.
Meanwhile, USD/CAD retreated 0.60% to trade at one-month lows of 1.3102.
In Canada, data on Friday showed that the consumer price index was flat last month, compared to expectations for a 0.1% uptick. On a yearly basis, consumer prices rose 1.3% in August, in line with expectations.
Core CPI, which excludes the eight most volatile items, gained 0.2% in August, as exected, and increased by 2.1% on a yearly basis.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.15% at 94.79, off three-and-a-half week lows of 94.20 hit earlier in the day.