By Alun John

HONG KONG, (Reuters) – The dollar fell against sterling and the euro on Thursday as the U.S. Federal Reserve stated that it will not hurry to increase interest rates while it begins dismantling its stimulus program from the pandemic.

Wednesday’s Fed announcement included a $15 billion monthly decrease in Treasuries monthly purchases. Jerome Powell chaired the Fed and said it will be patient in deciding when its benchmark overnight rate should rise from its near-zero levels.

Sterling rose to $1.3695 during Asian hours Thursday. The increase was due to Wednesday’s 0.5% gain. It also recovered from Tuesday’s two-week low at $1.3603.

The euro rose to $1.1614 after an announcement Wednesday. It gained 0.2% that day.

The Fed’s ability to delay rate increases for as long as possible is the focus of the market. This comes amid fears that inflation may be more severe than initially predicted.

“The Chairman stressed the fact that (Federal Open Market Committee), this meeting was much more than (quantitativeeasing) but this will not be the last time that such reasoning will apply. From here on, future FOMC meetings are going to return the focus back to the Fed’s interest rate strategy and tactics,” said Paul O’Connor, head of multi asset at Janus Henderson Investors in emailed comments.

The Bank of England will meet on Thursday to discuss the possibility of becoming the first major central bank to raise interest rates in the aftermath of the coronavirus pandemic. It could end a busy week of meetings with central banks.

Contrary to Fed, which was widely expected by observers and market participants that it would end stimulus shortly on Wednesday, BofE is not as unanimous in its decision.

The dollar rose slightly to $0.7463 elsewhere, thanks to the soft dollar. However, it still needs to rebound from Tuesday’s 1.2% drop after the Reserve Bank of Australia took a cautious tone at its crucial meeting.

However, the yen was still soft with one dollar trading at 114.04yen, just a short distance from its multi-year high of 112.69 yen last month.