Dollar Drifts Lower Against Major Rivals After Fed Policy Announcement
(RTTNews) - The U.S. dollar shed ground against some of its major counterparts on Wednesday after the Federal Reserve raised interest rates by 50 basis points and signaled more hikes.
The central bank projected at least an additional 75 basis points of increases in borrowing costs by the end of 2023. It also expects unemployment to rise next year, and economic growth might stall.
The text of the Fed's accompanying statement was largely unchanged from last month, however, with the central bank reiterating that it anticipates ongoing increases in rates will be appropriate.
The economic projections provided along with the announcement also suggest the Fed expects rates to ultimately be raised higher than forecast back in September.
In his post-meeting press conference, Fed Chair Jerome Powell said it will require "substantially more evidence" inflation is on a sustained downward trend, likely attracting even more attention to the inflation data due ahead of the next meeting.
The dollar index, which climbed to 104.16 soon after the central bank's rate announcement, dropped to 103.45 in quick time, and was last seen at 103.62, down 0.35% from the previous close.
Against the Euro, the dollar weakened to 1.0682 from around 1.0632.
The dollar dropped to 1.2425 against Pound Sterling
Against the Japanese currency, the dollar was little changed at 135.47 yen.
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