US dollar falls as Fed keeps interest rates steady

The US dollar slid on Wednesday, as the US Federal Reserve decided to keep interest rates unchanged and pledged patience in future policy making on interest rates adjustments, signalling more caution on its outlook.

"The Committee judges decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 per cent," the Federal Open Market Committee (FOMC) said in a statement, after it wrapped up its two-day policy meeting.

In late New York trading, the euro rose to $1.1481 from $1.1427 in the previous session, and the British pound increased to $1.3112 from $1.3100 in the previous session. The Australian dollar rose to $0.7254 from $0.7148, Xinhua reported.

The US dollar bought 108.93 Japanese yen, lower than 109.27 Japanese yen of the previous session. The US dollar slid to 0.9941 Swiss franc from 0.9950 Swiss franc, and it fell to 1.3148 Canadian dollars from 1.3283 Canadian dollars.

"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the FOMC said in a statement on Wednesday.

Fed Chairman Jerome Powell also said the case for raising interest rates "has weakened" in a news conference after the FOMC meeting on Wednesday.

Investors have expected that the Fed's interest rate hikes this year would be less than the four times it undertook in 2018. That would possibly increase the money flow in global financial markets later this year, which makes the dollar less valuable compared with other currencies.

--IANS

pgh/