The US dollar sustained large losses on Tuesday, experiencing its biggest one-day drop versus the euro in six years, as the Federal Reserve rendered a more dovish tone than anticipated on interest rates while emphasizing the currency’s effect on American exports.
The central bank removed the word “patient” from its statement regarding interest rate hikes. However, it downgraded its outlooks on the US economy and inflation, as well as lowered its rate projection.
Versus the Japanese yen, the greenback slipped to ¥119.29 overnight, its weakest since February 27. The currency also ended at $1.1062 per common currency.
Even after the selloff, the dollar has created “a solid base against the yen because people are buying on dips,” said Kaneo Ogino, Director at Global-info Co.
Fed Chair Janet Yellen said the firm greenback was compressing inflation at least on a transitory basis, implying a tacit admission the soaring dollar had stagnated its policy plan.
The material has been provided by InstaForex Company – www.instaforex.com