The U.S. dollar turned negative Wednesday, dropping to its lowest level since early February as the Federal Reserve reaffirmed its dovish policy stance.
The central bank revised its expectation of interest-rate increases in 2019 to zero, from an expected two increases previously. It also downgraded its economic outlook, forecasting 2.1% gross domestic product growth in 2019, rather than 2.3% as expected before. The PCE inflation forecast was cut to 1.8% this year, from 1.9% before. The Fed also said the unwinding of its balance sheet would end in September.
The ICE U.S. Dollar Index, which had been up 0.1% ahead of the central bank’s statement, dropped 0.6% to 95.792, touching its lowest level in more than six weeks, according to FactSet.
The euro the greenback’s biggest rival, shot higher on the dollar’s weakness, last buying $1.1442, compared with $1.1353 late Tuesday.
Source : Market Watch