WASHINGTON (dpa-AFX) - After climbing higher in the European session and holding firm till well past noon on Wednesday, the U.S. dollar pared gains after the Federal Reserve left interest rates unchanged and signaled a few rate cuts this year.
The Fed left the target range for the federal funds rate at 5.25 to 5.5% as widely expected. While the accompanying statement said Fed officials still need 'greater confidence' inflation is moving sustainably toward 2% before cutting rates, the projections still point to three rate cuts this year.
The latest projections suggest Fed officials expect rates to be lowered to a range of 4.50 to 4.75 percent by the end of 2024.
The interest rate forecast is unchanged from December and points to three quarter point rate cuts over the next nine months.
Fed officials raised their forecast for rates at the end of 2025 to a range of 3.75 to 4% from the range of 3.50 to 3.75% forecast in December.
The dollar index, which surged to 104.15, dropped to 103.38 later on in the session, netting a marginal loss.
Against the Euro, the dollar weakened to 1.0924, after having firmed to 1.0837 earlier in the day. Against Pound Sterling, the dollar eased to 1.2786 from 1.2684, and against the Japanese currency, it firmed to 151.25 yen.
The Aussie strengthened against the U.S. dollar, with the AUD/USD rising to 0.6587. Against Swiss franc, the dollar dropped to CHF 0.8869, and against the Loonie, it weakened to C$ 1.3494 after having firmed to C$ 1.3608 earlier in the day.
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