After Fed Minutes, Dollar Slumps to 1 1/2-Year Low Versus Yen

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The dollar touched the weakest level since October 2014 against the yen after the release of minutes from the Federal Reserve’s March meeting, when policy makers scaled back expectations for the pace of interest-rate increases in 2016.

The minutes shed more light on officials’ decision to keep rates unchanged last month, after hiking from near zero in December. The account showed policy makers debated an April rate hike, though several officials advocated a cautious approach, partly amid worries that slowing world growth could crimp the U.S. economy expansion.

The U.S. currency plunged March 16 after Fed Chair Yellen said the dollar’s two-year appreciation has weighed on inflation. The central bank also released projections implying two quarter-point rate increases this year, down from four forecast in December. The meeting dimmed the appeal of bets that U.S. monetary policy would diverge from the stimulus efforts of the Bank of Japan and the European Central Bank.

The dollar fell 0.5 percent to 109.79 yen as of 5 p.m. in New York, after touching 109.34. The greenback dropped 0.1 percent to about $1.14 per euro, approaching the weakest since October.

Source: Bloomberg