The U.S. dollar plunged against major currencies Thursday, as investors turned their focus to the Federal Reserve's tapering decision and the economic damage after U.S. Congress passed a budget deal to end a partial government shutdown and avert a debt default.

U.S. President Barack Obama early Thursday signed the 11th-hour deal, which passed both the Republicans-led House of Representatives and Democratic-led Senate on Wednesday night. The bill funds the government through Jan. 15 and raises the debt ceiling until Feb. 7.

However, investors are concerned that the deal failed to address many of the contentious issues and set up another fiscal debacle in a few months.

Moreover, analysts believe the government shutdown and delays of an agreement have damaged U.S. economy and undermined business sentiment.

The dollar index, which tracks the dollar against six major currencies, dropped 0.8 percent to 79.70, the lowest since Feb. 7.

On the economic front, U.S. jobless claims last week decreased by 15,000 to a seasonally adjusted 358,000, said the Labor Department.

The business activity expanded in October at a slower pace in the mid-Atlantic region, with the reading decreasing to 19.8 from 22.3 in the prior month, the Federal Reserve Bank of Philadelphia said Thursday.

In late New York trading, the euro jumped to 1.3676 dollars from 1.3533 dollars of the previous session, and the British pound increased to 1.6158 dollars from 1.5949 dollars. The Australian dollar went up to 0.9635 dollar from 0.9555 dollar.

The dollar bought 97.85 Japanese yen, lower than 98.74 yen of the previous session. The dollar moved down to 0.9021 Swiss franc from 0.9134 Swiss franc, and it went down to 1.0288 Canadian dollars from 1.0328 Canadian dollars.