The US dollar headed lower against a basket of major currencies on March 19th, after the Federal Reserve tempered expectations for higher interest rates stating it will rise at a slower pace than previously expected.
Earlier this month, the U.S. central bank downgraded its forecasts for growth and inflation. Meanwhile, the Australian dollar rose over 1% against USD as the greenback lost ground after the Federal Reserve statement.
The AUD/USD pair traded at 0.7718 then hold steady at 0.7691, tumbling 1.04%, while the EUR/USD currency pair declined by 0.60% hitting the 1.0694 level.
Elsewhere, GBP/USD declined by 1% to 1.4823, while USD/CHF increased by 1.65% to reach the 0.9942 level. The GBP plummeted to nearly five-months lows against the USD after the U.K. Office for National Statistics stated that the rate of unemployment remained unchanged at 5.7%, disappointing markets’ anticipations for a decline to 5.6%.
The dollar grinded higher against the yen and the pound, with USD/JPY increasing 0.41% to hit 120.60 and GBP/USD sliding 0.57% to 1.4895. The U.S. dollar index, which measures USD strength against a trade-weighted basket of six major currencies, gained 1.88% to reach 99.21, after falling to three-week lows of 94.77 earlier.
Excon Fuji Securities, stated that the American currency affects all countries and a stable dollar would be better for the U.S. and the entire world. She also warned that the stronger dollar acts as a drag on U.S. exports and pushes down inflation.
