The dollar hovered close to the highest level in seven weeks against the euro on Thursday, after Federal Reserve Chair Jerome Powell pushed back on the idea of a first U.S. interest rate cut as soon as March.

The yen, however, held on to overnight gains amid a decline in U.S. Treasury yields, as troubles at regional U.S. lender New York Community Bancorp sparked a rush to safer assets.

The U.S. dollar index, which measures the currency against a basket of six major peers including the euro and yen, slipped 0.07% to 103.54 in early Asian trading, giving back a little of Wednesday's 0.19% advance.

It remains close to the recent high of 103.82 touched on Monday of this week and Tuesday of last week, and previously not seen since Dec. 13.

The dollar has been buoyed by U.S. economic data suggesting the Fed can wait longer before cutting interest rates.

Traders are now pricing in a 38% probability the Fed will cut rates in March, down from 59% ahead of the Fed decision. It has fallen from 89% a month ago.

The euro eased 0.06% to $1.0811, edging back toward Wednesday's low of $1.0795, its weakest since Dec. 13.

Against Japan's currency, the dollar drifted 0.06% lower to 146.81 yen , adding to Wednesday's 0.47% decline.

The currency pair tends to track U.S. long-term yields, and the 10-year Treasury yield stood at about 3.95% on Thursday, down from Tuesday's closing level of 4.057%, despite Powell's less dovish tone.

U.S. yields, which move inversely to bond prices, had dipped before the Fed decision, as shares of New York Community Bancorp plunged after it cut its dividend and posted a surprise loss.

Investors snapped up U.S. Treasuries amid concerns about the health of other regional lenders.

Source: Reuters