NEW YORK (CNNMoney.com) -- The dollar recovered from earlier losses Thursday after the Federal Reserve hiked its discount rate, raising bets the central bank could move to tighten monetary policy soon.
What prices are doing: The dollar was unchanged versus the euro at $1.5320 and was up 0.1% against the U.K. pound at $1.5518. Against the Japanese yen, the dollar rose slightly to ¥91.87.
On Wednesday, the dollar rebounded against rivals on stronger-than-expected housing data and upbeat meeting minutes from the Federal Reserve.
What's driving prices: On Thursday the Fed unexpectedly announced plans to raise the discount rate, which is the rate it charges commercial banks and other depository institutions to borrow from the central bank's discount window, from 0.5% to 0.75%.
The move comes "in light of continued improvement in financial market conditions," the Fed said in a statement.
The Fed said the increase is not expected to lead to tighter financial conditions for households and businesses and does "not signal any change in the outlook for the economy or for monetary policy."
But some market participants see the move as another step towards an eventual tightening of monetary policy, said Nick Bennenbroek, chief currency strategist at Wells Fargo in New York.
"It's clearly an operational change, not a monetary policy change," he said. Though it could be seen as the Fed "preparing the market for eventual monetary tightening," he added.
The Fed has held interest rates at historic lows near zero for over a year as the economy struggled through a deep recession. But as conditions slowly improve, investors have become increasingly concerned about when the Fed will begin to raise rates.
"It's understandable that the dollar would strengthen on the back of this number," Bennenbroek said. "The markets may be viewing this as an indication of the timing of a possible change in monetary policy."
Earlier in the day, the Labor Department said that initial jobless claims surged to 473,000 last week. While this was up from 442,000 the previous week, it was worse than expected.
Analysts had forecast claims to hit 430,000, according to a consensus estimate from Briefing.com. 
| Overnight Avg Rate | Latest | Change | Last Week |
|---|---|---|---|
| 30 yr fixed | 3.80% | 3.88% | |
| 15 yr fixed | 3.20% | 3.23% | |
| 5/1 ARM | 3.84% | 3.88% | |
| 30 yr refi | 3.82% | 3.93% | |
| 15 yr refi | 3.20% | 3.23% |
Today's featured rates:
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 32,627.97 | -234.33 | -0.71% |
| Nasdaq | 13,215.24 | 99.07 | 0.76% |
| S&P 500 | 3,913.10 | -2.36 | -0.06% |
| Treasuries | 1.73 | 0.00 | 0.12% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Ford Motor Co | 8.29 | 0.05 | 0.61% |
| Advanced Micro Devic... | 54.59 | 0.70 | 1.30% |
| Cisco Systems Inc | 47.49 | -2.44 | -4.89% |
| General Electric Co | 13.00 | -0.16 | -1.22% |
| Kraft Heinz Co | 27.84 | -2.20 | -7.32% |
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