The U.S. dollar strengthened against other major currencies in the European session on Thursday, after the U.S. Federal Reserve signaled openness to future rate cuts, adding a March rate cut is unlikely.

The U.S. Federal Reserve kept key rates unchanged but indicated that cuts to interest rates are not imminent in view of elevated inflation.

Trading later in the day may also be impacted by reaction to the release of reports on weekly jobless claims, manufacturing activity and construction spending ahead of the all-important January jobs report, due Friday.

In the Asian trading now, the U.S. dollar rose to nearly a 2-month high of 1.0781 against the euro and nearly a 2-1/2-month high of 0.6521 against the Australian dollar, from yesterday's closing quotes of 1.0822 and 0.6579, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.06 against the euro and 0.64 against the aussie.

Against the pound and the Swiss franc, the greenback advanced to a 2-day high of 1.2643 and a 3-day high of 0.8651 from Wednesday's closing quotes of 1.2698 and 0.8619, respectively. The greenback may test resistance around 1.25 against the pound and 0.88 against the franc.

The greenback edged up to 147.09 against the yen, from yesterday's closing value of 146.47. On the upside, 150.00 is seen as the next support level for the greenback.

Against the New Zealand and the Canadian dollars, the greenback to 3-day highs of 0.6096 and 1.3464 from Wednesday's closing quotes of 0.6141 and 1.3420, respectively. The next support levels for the greenback is seen around 0.59 against the kiwi and 1.36 against the loonie.

Looking ahead, PMI reports from various European economies and U.K. for January, Eurozone flash inflation data for January and unemployment data for December.

At 7:00 am ET, the Bank of England's monetary policy announcement is due. The central bank is widely expected to leave its benchmark rate unchanged at 5.25 percent. The current rate is the highest since early 2008.

In the New York session, U.S. weekly jobless claims, U.S. and Canada PMI reports for January and U.S. construction spending for December are slated for release.

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