07:53 AM EST, 12/19/2024 (MT Newswires) -- The US dollar fell against its major trading partners early Thursday, except for a gain versus the yen, but remained above levels a day earlier as markets digest the Federal Open Market Committee's decision to lower the federal funds rate target range to 4.25% to 4.50% Wednesday afternoon and prepare for a busy day of economic data releases.

The Summary of Economic Projections showed a median estimate of only two 25 basis point rate cuts in 2025 compared with the four cuts estimated as recently as three months ago, with upward adjustments to inflation and growth estimates and a downward adjustment to the unemployment rate.

There were matching upward adjustments to the year-end federal funds rate estimates for 2026, 2027 and the longer-run rate.

Federal Reserve Chairman Jerome Powell said that the current level of the federal funds rate range is "significantly less restrictive" than it was before the cumulative 100 basis point rate reduction this year, allowing the FOMC to be more cautious when considering future reductions. Still, policy is restrictive compared with the assumed neutral rate, and will necessitate more rate reductions.

Thursday's busy schedule starts with weekly jobless claims, the final look at Q3 gross domestic product and the Philadelphia Fed's manufacturing reading for December, all at 8:30 am ET.

Existing-home sales and leading indicators data for November are due to be released at 10:00 am ET, followed by weekly natural gas stocks storage data at 10:30 am ET. The Kansas City Fed's manufacturing reading for December is due at 11:00 am ET.

A quick summary of foreign exchange activity heading into Thursday:

EUR/USD rose to 1.0403 from 1.0366 at the Wednesday US close, but was still below a level of 1.0499 at the same time Wednesday morning. The Eurozone current account surplus narrowed in October according to data released earlier Thursday. The next European Central Bank meeting is scheduled for Jan. 30.

GBP/USD rose to 1.2599 from 1.2576 at the Wednesday US close, but was well below a level of 1.2707 at the same time Wednesday morning. The Bank of England held its target rate steady, as expected, though the vote was 6-to-3, with those three dissenting members preferring a rate cut. The next Bank of England meeting is scheduled for Feb. 6. Earlier Thursday, UK car registrations rebounded in November after a large decline in October.

USD/JPY rose to 156.7798 from 154.6889 at the Wednesday US close and 153.7242 at the same time Wednesday morning. The Bank of Japan maintained its current target rate overnight, as expected, but said it plans to raise the rate in 2025 if inflation and economic growth progress as expected. BoJ Governor Kazuo Ueda said the BoJ is waiting for more data, including information on new US trade policies, before acting. The next Bank of Japan meeting is scheduled for Jan. 23-24.

USD/CAD fell to 1.4378 from 1.4433 at the Wednesday US close, but was above a level of 1.4323 at the same time Wednesday morning. Canadian average weekly earnings data for October are due to be released at 8:30 am ET. The next Bank of Canada meeting is scheduled for Jan. 29.