The U.S. dollar displayed broad-based strength on Wednesday after the Fed left benchmark interest rates unchanged as widely expected. After the decision, the Fed stated that it will commit to 'exceptionally low' rates for an 'extended period', however, the Fed admitted that 'economic activity has continued to pick up and that the deterioration in the labor market is abating'. Tuesday's better-than-expected PPI data delivered little effect on the Fed's long-term inflation forecasts and monetary policy, and officials stated 'that inflation will remain subdued for quite some time'.

Eurozone inflation in November was revised to 0.1% m/m and 0.5% y/y respectively. The core inflation, excluding food n energy for November, came in at 0.0% m/m and 1.0% y/y. The single currency rose in European morning in part driven by the positive news and also on renewed risk appetite due to the rally in European equities (DAX n FTSE rose by more than 1% n 0.8%). Euro eventually reached an intra-day high at 1.4591 in NY morning. However, euro retreated sharply after the Fed left rate unchanged at 0.25%, falling to as low as 1.4505 (just 2 ticks above y'day's 1.4503 low) before stabilising.

U.K. claimant count unexpectedly decreased by only 6,300 (forecast was for a rise of 13,000), its first fall since February 2009. U.K. ILO unemployment rate ticked higher to 7.9% from 7.8%. The British pound rose after the data and hit an intra-day high of 1.6412 before retreating sharply after the FOMC statement.

The yen was under pressure against the greenback in European session n early New York session, falling to as low as 89.39, however, dollar's broad-based rebound after the Fed's rate decision lifted the pair to an intra-day high of 89.99. In other news, U.S.November CPI rose by 0.4% m/m n 1.8% y/y whilst housing starts increased by 8.9% to 0.574 million.

Data to be released on Thursday include Japan leading indicators, German retail sales, Switzerland ZEW index, Canada CPI, U.S. jobless claims, leading indicators and Philadelphia Fed survey.