SINGAPORE--The dollar bounced against riskier currencies and the safe-haven yen hit a one-month high on Thursday as the U.S. Federal Reserve’s dour economic outlook spooked investors.

The moves recouped the greenback’s initial losses after the Fed’s policy stance, projecting rates near zero for years, was welcomed as a sign of its continued support for asset prices.

The Australian dollar retreated from an 11-month high and fell 1 percent to $0.6923 as investors took profit on a rally that has carried the Aussie 3.8 percent higher in June.

The kiwi gave up a four-and-a-half month high and fell 0.7 percent to $0.6488. The yen rose marginally to 106.90, its highest since mid-May.

“The Fed met expectations, but at the same time it’s brought the focus back on the economy,” said Moh Siong Sim, FX analyst at the Bank of Singapore.

“There’s also a sense that the rally has gone a bit too far too fast, and while economic numbers have been getting less bad it does not mean that it’s good.”

Fed policymakers projected the U.S. economy to shrink 6.5 percent this year and the unemployment rate to be 9.3 percent at year’s end.

“It is a long road,” Fed Chair Jerome Powell said via video link on Wednesday. “We are not even thinking about thinking about raising rates.”

It was enough of a reminder of how deep the globe’s economic troubles are to take the edge off two euphoric weeks in financial markets, and sent investors out of stocks, away from riskier currencies and back into bonds and the dollar.

“That’s been the follow-through, and it’s played into a broad rebound in the dollar,” said Rodrigo Catril, FX analyst at National Australia Bank in Sydney.

Sterling fell 0.6 percent to $1.2666 and there were losses from the export-exposed South Korean won, which fell half a percent, to the oil-sensitive Norwegian krone which dropped about 1 percent.

Against a basket of currencies, the dollar erased Tuesday losses to sit at 96.437.

The euro--which hit a three-month peak overnight--put up the best fight of the majors, sliding only 0.4 percent, leaving open the possibility of more downside to come for the dollar once the dust settles. The single currency last bought $1.1333.

“The takeaway is the Fed remains fully committed to its ultra-easy monetary policies,” said NAB’s Catril. “That should be supportive for risk assets, and on a structural basis we still think the U.S. dollar is embarking on a cyclical downturn.”

Neither Powell nor the Fed’s statement brooked any suggestion that the central bank’s massive liquidity injections would be waning any time soon, with the statement promising bond buying to continue “at least at the current pace.”

Powell also said the question remains open as to whether the Fed will use yield curve controls, reinforcing expectations that it is gearing up to do so and pressing benchmark 10-year yields back down under 0.8 percent.

That provided at least one bright spot in Asia, with the Thai baht hitting an almost 5 month high and the high-yielding Indonesian rupiah steady.

Markets are looking ahead to U.S. jobless claims data due at 1230 GMT.

A slight slowdown in jobless claims is expected, though some traders might be primed for a positive surprise after Friday’s payrolls report showed a completely unexpected easing in the jobless rate.