Dollar Falls On Rate Cut Bets
(RTTNews) - The U.S. dollar, which showed signs of recovering from early weakness around mid morning on Wednesday, drifted down after the Federal Reserve left its interest rates unchanged, but signaled a rate cut in September.
The Fed acknowledged "some further progress" toward its inflation objective but reiterated officials need "greater confidence" inflation is moving sustainably toward 2% before cutting rates.
Notably, the Fed said it is attentive to the risks to "both sides of its dual mandate" after previously saying it was "highly attentive to inflation risks."
The Fed said it would continue to monitor the implications of incoming information for the economic outlook and reiterated it would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of its goals.
According to CME Group's FedWatch Tool, there is currently a 93.5% chance the Fed will lower rates by a quarter point in September.
The dollar index, which recovered to around 104.40 from a low of 103.93 it touched in early New York session, dropped to 104.00 after the central bank's monetary announcement.
Against the Euro, the dollar weakened to 1.0826
The dollar weakened to 1.2854 against Pound Sterling. Against the Japanese currency, the dollar slipped to 150.03 yen a unit, down nearly 2% from the previous close.
Against the Aussie, the dollar edged down slightly to 0.6540. The Swiss franc firmed to 0.8780 a unit of greenback, while the Loonie strengthened to 1.3806 a unit of the U.S. currency.
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