US dollar rate index news: The dollar hovered close to the highest level in seven weeks against the euro on Thursday, after Federal Reserve Chair Jerome Powell pushed back on the idea of a first US interest rate cut as soon as March.

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The yen, however, held on to overnight gains amid a decline in US Treasury yields, as troubles at regional US lender New York Community Bancorp sparked a rush to safer assets.

The US dollar index, which measures the currency against a basket of six major peers including the euro and yen, slipped 0.07 per cent to 103.54 in early Asian trading, giving back a little of Wednesday's 0.19 per cent advance.

It remains close to the recent high of 103.82 touched on Monday of this week and Tuesday of last week, and previously not seen since Dec. 13. The dollar has been buoyed by US economic data suggesting the Fed can wait longer before cutting interest rates.

Powell gave the currency another push overnight by calling a cut in March "not the base case." "I don't think it's likely the committee will reach a level of confidence by the time of the March meeting" to ease policy, "but that's to be seen," Powell said at a news conference after Fed officials left rates unchanged but dropped a longstanding reference to possible further hikes in borrowing costs.

"We can forget about any more tightening," said Art Hogan, chief market strategist at B. Riley Wealth in New York. However, the timing of a rate cut "has been pushed out to what had been the fringes of consensus," Hogan said.

Traders are now pricing in a 38 per cent probability the Fed will cut rates in March, down from 59 per cent ahead of the Fed decision. It has fallen from 89 per cent a month ago. The euro eased 0.06 per cent to $1.0811, edging back toward Wednesday's low of $1.0795, its weakest since Dec. 13.

Against Japan's currency, the dollar drifted 0.06 per cent lower to 146.81 yen , adding to Wednesday's 0.47 per cent decline. The currency pair tends to track US long-term yields, and the 10-year Treasury yield stood at about 3.95 per cent on Thursday, down from Tuesday's closing level of 4.057 per cent, despite Powell's less dovish tone.

US yields, which move inversely to bond prices, had dipped before the Fed decision, as shares of New York Community Bancorp plunged after it cut its dividend and posted a surprise loss.
Investors snapped up US Treasuries amid concerns about the health of other regional lenders.

"It was certainly striking that the biggest move in UST yields was hours before the FOMC rather than after," said Sean Callow, a foreign-exchange strategist at Westpac. However, "if markets regard the knee-jerk response to the regional bank news as an over-reaction, then the less dovish FOMC will be the key story in coming days, supporting the US dollar," he added.