Dollar Declines as Fed Lowers Projections for Benchmark Rate

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The dollar declined to a one-week low after the Federal Reserve lowered its 2016 and 2017 projections for U.S. interest rates.

The U.S. currency slid even as the central bank policy makers raised their assessment of the economy and stayed on track to raise interest rates this year for the first time in almost a decade. The Fed’s median estimate for the end of 2016 fell to 1.625 percent, compared with 1.875 percent forecast in March for the so-called dots.

The Bloomberg Dollar Spot Index, which tracks the currency versus 10 major peers fell, 0.2 percent to 1,172.74 as of 2:27 p.m. in New York, reaching the strongest level since June 10.

The U.S. currency declined 0.3 percent to $1.1283 per euro. It gained 0.4 percent to 123.87 yen, after rising as much as 1.1 percent.

Officials kept the benchmark overnight fed funds rate in a zero to 0.25 percent range, where it has been since December 2008 to bolster the economy after the worst recession since the Great Depression.

Source: Bloomberg