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 The stronger dollar helped push U.S. oil prices to six-year lows and
weighed on the price of gold.
Greece, where an anti-austerity prime minister took over on Monday,
also kept investors nervous, although Greek shares regained some
ground after falling 9.2 percent on Wednesday.
The Fed, after a two-day policy meeting, said it would be "patient"
and would take international developments into account in deciding
when to raise borrowing costs. Some saw that as indicating any rate
increase could be delayed.
U.S. shares, which closed lower on Wednesday after the Fed
statement, with energy stocks weakening, were set to open modestly
higher, according to stock index futures.
German government bond yields fell, as did U.S. Treasuries, on this
dovish view. U.S. 30-year bond yields reached a record low on
Wednesday. Concern over Greece, whose new government opposes the
terms of Greece's international bailout, also boosted demand for
low-risk debt.
European shares, driven lower on Tuesday and Wednesday, after the
Syriza party won Sunday's election in Greece, fell again. The
pan-European FTSEurofirst 300 index was last down 0.5 percent.
"The bullish tone by the Fed on the economy caught investors
off-guard," said John Plassard, senior equity sales trader at
Mirabaud Securities in Geneva. "Meanwhile, investors are fretting
about Greece again, and it could go on for a while."
The main Athens stock index was up 2.4 percent as bank shares,
hammered earlier this week, bouncing off record lows. Greek 10-year
bond yields, which had risen some 2 percentage points since the
election, gave up some of those gains and were last down 21 basis
points at 10.6 percent.
Shares were weak in Asia. Japan's Nikkei fell 1.1 percent in its
biggest one-day drop in two weeks. MSCI's main measure of
Asia-Pacific shares, excluding Japan, fell 1.2 percent.
The Fed's monetary policy stance contrasts with those of other major
central banks. The European Central Bank last week announced a
bond-buying program to stimulate the economy.
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Highlighting the problem, preliminary January inflation data from
Germany showed consumer prices falling 0.5 percent, more than
forecast.
The dollar index, which measures the greenback against a basket of
currencies, was up 0.2 percent. The dollar was up 0.5 percent at
118.09 yen . The euro, however, gained 0.1 percent to $1.1294.
"By underlining 'international developments', the Fed is
highlighting that process and the attraction of the U.S. as an
investment destination. That all plays in to dollar strength," said
Ian Stannard, head of European FX strategy with Morgan Stanley in
London.
The New Zealand dollar fell to its lowest since March 2011 after the
central bank opened the door to a possible rate cut.
Brent crude oil held above $48 a barrel. U.S. oil futures were down
0.1 percent at $44.43. They had fallen to $44.08, the lowest in
nearly six years, after data showed U.S. stockpiles rose by almost 9
million barrels last week.
Gold retreated after the Fed outlook lifted the dollar and was last
at $1,268.86 an ounce.
(Additonal reporting Blaise Robinson in Paris, Patrick Graham in
London; Editing by Crispian Balmer, Larry King)
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