By Scott Kanowsky

Investing.com -- The dollar lost ground on Thursday as investors digested an as-expected 75 basis point interest rate rise by the Federal Reserve and eyed comments about potential future hikes.

The dollar index - which measures the greenback against a basket of other major currencies - dropped by 0.31% to 106.12 as of 02:40 EST (0640 GMT), hovering just above its lowest mark since July 5.

The U.S. currency's yield-sensitive pairing with the yen (USD/JPY) also fell 0.86% to 135.38 yen after a sharp decline in the 2-year Treasury yield. It earlier touched 135.105 yen, the weakest level since July 6.

The moves come after the Fed increased its policy target interest rate on Wednesday by three-quarters of a percent for the second month in a row. Traders focused in particular on statements from Fed Chair Jerome Powell, who dropped guidance on the size of the next rate rise. That, in turn, heightened the possibility that the central bank could soon slow the pace of hikes.

“We have the best part of two months until the September 21st FOMC meeting, a period that includes two jobs reports, two inflation reports and the Fed’s Jackson Hole symposium. A lot could happen in that time so it is unsurprising that the Fed is being somewhat vague in its forward guidance,” said analysts at ING, in a note.

Also factoring into investors' minds is the latest reading of U.S. gross domestic product for the second quarter, which is due out later today. Another negative reading would meet the technical definition of a recession, though the United States chooses to define such an event differently.

Meanwhile, the euro is marginally higher against the dollar, up 0.04% to $1.0206, ahead of preliminary German inflation data scheduled for release later on Thursday. Traders will be on the lookout for signs that price pressures in Europe's largest economy - and the broader Eurozone - are starting to ease.

The pound also gained against the dollar, trading in the green by 0.16% to $1.2170.

Finally, cryptocurrency Bitcoin surged by 8.62% to $23,117.2, adding on to sharp gains from the prior session.

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