The US dollar was lower against other major currencies in early afternoon trading here after the Federal Reserve released overnight a statement interpreted as lessening the chances of further increases in US interest rates, dealers said At 12.30 pm (0330 GMT) here, the euro was at 1.2702 usd, up from 1.2668 usd in Sydney just over three hours earlier. The dollar was at 114.91 yen, down from 115.18 yen in Sydney. After increasing the federal funds rate by 25 basis points, as expected, the Federal Open Market Committee (FOMC) made a statement perceived as less hawkish in tone than its previous one, dealers said. "Although the latest FOMC statement did not rule out the prospect of further rate hikes, the market, which had gone too long on the dollar on expectations for a more hawkish statement, rushed to unload massive long positions on the greenback," said Mizuho Corporate Bank dealer Tatsuro Karitani. The dollar was also pressured by the Japanese core consumer price index for last month, which was up 0.6 pct from a year earlier. "The latest price data confirmed that Japanese prices are now in a solid rising trend," said JP Morgan Securities chief economist Masaaki Kanno said. "If the central bank decides not to hike rates in July, it needs to explain why," he said. The euro surged on expectations that the difference between interest rates in the US and the euro zone will shrink, dealers said. "The euro now seems to have come to a key turning point where it will either form a new trading range of 1.27-1.29 usd, or remain in the 1.25-1.27 usd range," Karitani said.