Dollar rises after US Federal Reserve policy statement

By David Henry

NEW YORK (Reuters) - The U.S. dollar rose on Wednesday after the U.S. Federal Reserve said it would end its pandemic-era bond purchases in March and paved the way for three quarter-percentage-point interest rate increases in 2022.

The dollar index was up 0.2% for the day to 96.737 shortly after the announcement.

Fed officials also forecast that inflation would run at 2.6% next year, compared to the 2.2% projected as of September.

The move in the index against major currencies came at the expense of the euro, the Japanese yen and British pound, among others.

Before the announcement, the dollar had been trading in a narrowly through the day and close to its highest levels in more than a year.

The greenback has been bolstered by expectations that U.S. interest rates will rise faster than those in other countries. The Fed is moving more quickly than the European Central Bank, for example, to pull back monetary support for the economy in the face of the evolving coronavirus pandemic.

The ECB and the Bank of England hold policy meetings on Thursday.

The euro was down 0.1% against the dollar at $1.1241 at 2:11 p.m. Eastern (1911 GMT).

Versus the Japanese yen, the dollar was up 0.5% to 114.105.

Britain's pound fell 0.2% to $1.3202.

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Currency bid prices at 2:11PM (1911 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index

96.7370 96.5620 +0.20% 7.508% +96.9140 +96.4050

 

Euro/Dollar

$1.1241 $1.1258 -0.14% -7.99% +$1.1277 +$1.1221

 

Dollar/Yen

114.1050 113.5600 +0.49% +10.45% +114.2350 +113.6300

 

Euro/Yen

128.26 128.07 +0.15% +1.06% +128.3500 +128.0000

 

Dollar/Swiss

0.9278 0.9242 +0.42% +4.90% +0.9294 +0.9235

 

Sterling/Dollar

$1.3202 $1.3227 -0.22% -3.40% +$1.3282 +$1.3172

 

Dollar/Canadian

1.2901 1.2864 +0.29% +1.31% +1.2935 +1.2846

 

Aussie/Dollar

$0.7132 $0.7106 +0.37% -7.29% +$0.7151 +$0.7093

 

Euro/Swiss

1.0431 1.0402 +0.28% -3.48% +1.0440 +1.0400

 

Euro/Sterling

0.8512 0.8510 +0.02% -4.76% +0.8529 +0.8487

 

NZ

Dollar/Dollar $0.6731 $0.6742 -0.16% -6.27% +$0.6760 +$0.6702

 

Dollar/Norway

9.0720 9.1010 -0.28% +5.69% +9.1210 +9.0730

 

Euro/Norway

10.2070 10.2540 -0.46% -2.48% +10.2777 +10.1940

 

Dollar/Sweden

9.1366 9.1392 -0.15% +11.46% +9.1675 +9.0941

 

Euro/Sweden

10.2722 10.2875 -0.15% +1.94% +10.3080 +10.2448

 

 

(Reporting by David Henry in New York and Elizabeth Howcroft in London; Editing by Gareth Jones, Bernadette Baum, Mark Heinrich, Philippa Fletcher)