The U.S. Dollar dropped to an eight-month low against a basket of currencies in early trading on Thursday. It comes amid a grim U.S. corporate earnings season, which is driving recession concerns ahead of key central bank meetings scheduled for next week.

"There are now signs the U.S. economy may be slowing in a more meaningful manner," economists at Wells Fargo told Reuters.

"With the Fed no longer leading the charge on interest rate hikes and U.S. economic trends set to worsen, we now believe the U.S. Dollar has entered a period of cyclical depreciation against most foreign currencies.

The FOMC, the Fed's policy-setting committee, will begin a two-day meeting between 31 January and 1 February, and markets have already priced in a 25-basis-point (bps) interest rate hike, stepping down from the 50 bps and 75 bps implemented by the central bank seen last year.

Meanwhile, the Euro managed a fresh nine-month high of $1.09295 and was up 0.15% to $1.2419, suggesting a new push above the threshold of $1.245, where it failed last week.

The Australian Dollar made a five-month high on the news that headline CPI was 7.8%, beating expectations of 7.6% year-on-year to the end of December and against 7.3% previously.

The December quarter-on-quarter headline CPI was 1.9% rather than the 1.6% anticipated and 1.8% before that.

Elsewhere, the Pakistani Rupee plummeted about 7% against the Dollar, two days after FX firms scrapped a cap on the exchange rate, in a move that could help convince the International Monetary Fund to restart its lending to the country.

It comes following a turbulent year of wild swings throughout 2022, hitting its record low against the U.S. Dollar multiple times, only to end its worst 12-month period since the 2008 global financial crash with a massive depreciation of 22%.