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Business

US dollar declines after Fed's stance on rates

New York, June 21

The US dollar weakened against its major rivals on Thursday after the central bank signalled possible rate cuts later this year.

In late New York trading, the euro increased to $1.1292 from $1.1244 in the previous session, and the British pound was up to $1.2699 from $1.2666 in the previous session, Xinhua news agency reported. 

The Australian dollar rose to $0.6923 from $0.6889.

The US dollar bought 107.27 Japanese yen, lower than 107.97 Japanese yen of the previous session. The US dollar was down to 0.9806 Swiss franc from 0.9922 Swiss franc, and it was down to 1.3191 Canadian dollars from 1.3292 Canadian dollars. 

The US Federal Reserve on Wednesday left the target range for the federal funds rate unchanged at 2.25 per cent to 2.5 per cent, and opened the door for lowering interest rates in the future, citing increased economic uncertainties.

"In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion," said the Fed's policy-making committee, dropping its commitment to being "patient" in its policy statement.

The remarks came as market participants are pricing in a very high probability that the Fed will cut rates in the near future.

The dollar index, which measures the greenback against six major peers, fell 0.52 per cent at 96.6274 in late trading.