The U. S. dollar was on the defensive against the euro and yen on Thursday, having pulled back sharply after Federal Reserve meeting minutes suggested policymakers were in no hurry to raise interest rates. Fed officials widely agreed last month the economy was nearing a point where rates should move higher, but were worried lagging inflation and a weak global economy posed risks too big to commit to "liftoff." Traders expecting a September rise subsequently sold the dollar, pushing it to a three-week low of 123.68 yen JPY= in overnight trade from a high of 124.47. It was last at 123.935. The probability of a September hike is now 45 percent from about 50 percent towards the end of July, according to the Chicago Mercantile Exchange's Fedwatch. The euro climbed to a six-day high of $1.1149 EUR=, while the dollar index was flat at 9.379 .DXY after an overnight loss of 0.7 percent. "The minutes already reflected concern held by policymakers that inflation was not rising as desired even before the recent financial market turmoil," said Monex senior strategist Masafumi Yamamoto in Tokyo. "The minutes have not factored in falling oil prices and events in China that have taken center stage since the meeting in July. It would not be surprising if policymakers are even more dovish now in light of these events." Investors will be able to gauge policymakers' latest thinking when San Francisco Fed President John Williams speaks in Indonesia later in the global day. "Williams is a centrist and voter and as he is speaking in Asia, may address concerns around developments in China delaying Fed liftoff," wrote Westpac senior currency strategist Sean Callow in Sydney. In contrast to the dollar, sterling continued to draw support on firmer expectations the Bank of England would raise rates as early as next year. Higher-than-expected core inflation in Britain along with outgoing policymaker David Miles saying a rate hike would come "pretty soon" supported the pound. Cable was steady at $1.5681 GBP=D4 and within reach of a seven-week peak of $1.5717 scaled Tuesday. The dollar's broad decline cushioned commodity currencies like the Canadian and Australian dollars, which had come under pressure earlier as oil prices plumbed fresh six-and-a-half-year lows and on persistent worries about China's slowing economy. The Canadian dollar rose to C$1.3109 CAD=D4 per dollar after hitting a low of C$1.3180 overnight. The Australian dollar rebounded from a one-week low of $0.7312 AUD=D4 to as high as $0.7373, but was cut short by a drop in Chinese stocks. The Aussie, often used as a liquid proxy of China trades, stood little changed at $0.7347. It touched a six-year low of $0.7217 last week after China devalued its currency, sharpening concern about the health of the world's second-largest economy.