US dollar surges after Fed policy statement

The US dollar jumped against most other major currencies as the Federal Reserve announced start of balance sheet reduction from October.

In late New York trading on Wednesday, the euro fell to $1.1895 dollars from 1.1998 dollars in the previous session, and the British pound lost to $1.3485 from $1.3523 in the previous session, Xinhua news agency reported.

The Australian dollar rose to $0.8016 from $0.8012.

The US dollar bought 112.27 Japanese yen, higher than 111.46 yen of the previous session.

The US dollar increased to 0.9698 Swiss franc from 0.9625 Swiss franc, and it moved up to 1.2357 Canadian dollars from 1.2272 Canadian dollars.

The US Federal Reserve on Wednesday kept interest rates unchanged, but announced that it will start to unwind its $4.5 trillion balance sheet from October, a further step to end the loose monetary policy.

"Information received since the Federal Open Market Committee met in July indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year," said the Fed in a statement released after its two-day monetary policy meeting.

The central bank said Hurricanes Harvey, Irma, and Maris were expected to affect US economy in the near term, while they would not alter the course of the economy in the medium term.

Fed officials continue to expect that the US economy will expand at a moderate pace in the future.

On the economic front, the National Association of Realtors said on Wednesday that existing home sales decreased 1.7 per cent to a seasonally adjusted annual rate of 5.35 million units last month. That was the lowest level since August 2016.

The dollar index, which measures the greenback against six major peers, increased 0.83 per cent at 92.558 in late trading.

--IANS

pgh/