The dollar rebounded
from its biggest drop in six years amid speculation the Federal Reserve
will still raise borrowing costs this year even after cutting its
interest-rate projections.
The greenback
strengthened against 13 of its 16 major peers after the Fed moved a step
closer to higher rates against a backdrop of global easing, led by the
European Central Bank and Bank of Japan. Fed Chair Janet Yellen wouldn’t
rule out a rate increase as early as June after the central bank
removed its commitment to patience on tighter monetary policy Wednesday.
The Bloomberg Dollar
Spot Index, a gauge of the currency’s performance against 10 major
peers, climbed 1.4 percent to 1,211.18 as of 3:05 p.m. New York time,
halting a three-day drop. The gauge reached 1,222.12 on March 13, the
highest level based on closing prices going back to 2004.
The U.S. currency
strengthened 2 percent to $1.0644 per euro, its first advance in four
days. The dollar gained 0.7 percent to 120.94 yen.
Bloomberg’s dollar
gauge slumped 1.8 percent on Wednesday, the most since the Fed announced
Treasury bond purchases in March 2009, as the U.S. central bank almost
halved its expectations for year-end rates. The federal funds rate will
be 0.625 percent by the end of 2015, according to Fed members’
estimates, versus a December forecast of 1.125 percent.
Source : Bloomberg
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