The U.S. dollar weakened against its major rivals in the European session on Thursday, as markets responded positively to the Fed's announcement that the QE tapering could start soon given progress towards the central bank's goals.

In its latest monetary policy decision on Wednesday, the Fed indicated that tapering will happen soon, but didn't give any specific timing.

The Fed said "a moderation in the pace of asset purchases may soon be warranted" and signaled an earlier rate hike after its conclusion.

Concerns about property developer China Evergrande reduced somewhat after it had settled a coupon payment on 5.8% September 2025 bond due today.

But its interest payments on $83.5 million in offshore bonds has not been resolved.

The greenback dropped to 1.3680 against the pound, 1.1733 against the euro and 0.9229 against the franc, off its early highs of 1.3610 and 1.1684 and a 2-day high of 0.9274, respectively. The greenback is poised to find support around 1.40 against the pound, 1.20 against the euro and 0.90 against the franc.

The greenback hit 6-day lows of 1.2650 against the loonie and 0.7058 against the kiwi, down from its prior high of 1.2796 and near a 4-week high of 0.6982, respectively. On the downside, 1.22 and 0.72 are possibly seen as its next support levels against the loonie and the kiwi, respectively.

The greenback edged down to 0.7290 against the aussie, from an Asian session's high of 0.7223. Next key support for the greenback is likely seen around the 0.75 region.

The greenback pulled back from a 3-day high of 110.00 against the yen, with the pair trading at 109.73. The greenback may locate support around the 108.00 level

Looking ahead, the Bank of England's monetary policy announcement is due at 7:00 am ET. The Monetary Policy Committee is widely expected to hold the key rate at a record low of 0.10 percent and the quantitative easing programme at GBP 895 billion.

Canada retail sales for July and and U.S. weekly jobless claims for the week ended September 18 will be released in the New York session.

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