Yahoo Finance U.S. Dollar Slumps to Three-Month Low on Dovish Fed
Investing.com - The U.S. dollar fell to a three-month low on Thursday after the Federal Reserve indicated that it was prepared to cut interest rates this year.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was down 0.4% to 96.180 by 10:27 AM ET (14:27 GMT).
Federal Reserve policymakers signaled on Wednesday that they would be willing to cut rates in order to combat slowing global growth and cooling inflation.
Fed central bankers slashed their rate outlook for the rest of the year, according to the Fed’s dot plot projections, while Chairman Jerome Powell said at a press conference that many agree the case for lowering rates is increasing.
The Fed also dropped its pledge to be patient, instead saying it will “act as appropriate to sustain the expansion” and to “closely monitor the implications of incoming information for the economic outlook.”
The dollar fell against the safe-haven Japanese yen, with USD/JPY down 0.4% to 107.63.
The Bank of Japan kept rates steady overnight, but echoed the Fed in its warning on global risks. The BOJ signaled it could also increase stimulus to help the Japanese economy.
Elsewhere, the euro was stronger on the weak dollar, with EUR/USD up 0.7% to 1.1305, while sterling was also higher. GBP/USD rose 0.4% to 1.2692. USD/CAD fell 0.8% to 1.3177.
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