Amwal Al Ghad English - 2015-03-19 08:06:00
The dollar steadied on Thursday, rising off lows hit overnight after the Federal Reserve struck a much more dovish than expected tone on interest rates.
The Fed dropped the word "patient" from its statement in terms of raising interest rates, as expected, but also downgraded its views on the economy and inflation and lowered its interest rate trajectory. That signaled a far more gradual path to policy normalization than many investors had foreseen.
Fed Chair Janet Yellen, who like most central bankers tends to avoid discussing currencies, told reporters the strong dollar is compressing inflation "at least on a transitory basis," which suggests a tacit admission that the soaring dollar had stalled the central bank's policy-tightening plan.
"Most people think the Fed looks very dovish, and might start to hike not in June, but maybe in September or October," said Masashi Murata, senior currency strategist at Brown Brothers Harriman in Tokyo.
"Yellen wants to get a free hand in the timing of hiking rates," he said. More»