Thu, 07 Dec 2023

NEW YORK, Sept. 20 (Xinhua) -- The U.S. dollar ended nearly flat in late trading on Wednesday, after the Federal Reserve kept its benchmark lending rate unchanged at a two-decade high, but suggested that at least one more increase is likely this year as inflation remains elevated.

The dollar index, which measures the greenback against six major peers, fell 0.03 percent to 105.1252 in late trading.

As anticipated, the Federal Open Market Committee held its key policy rate on Wednesday at between 5.25 percent and 5.5 percent, the highest in 22 years.

"In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments," the Fed said in a statement.

According to Fed Chair Jerome Powell at a news conference Wednesday afternoon, "Growth in real GDP has come in above expectations. Consumer spending remains particularly robust. Labor supply and demand continue to come into better balance."

He argued that the "Fed projections are not a plan, policy will adjust as appropriate," and "be prepared to raise rates further if appropriate."

Fed's upward revision of 2024 interest rates from 4.6 percent to 5.1 percent halted the U.S. dollar's fall. The Fed's new summary of economic projections now calls for GDP stronger growth of 2.1 percent this year, more than double its prior forecast, with the forecast for unemployment coming down to 3.9 percent from a prior estimate of 4.1 percent.

CME Group's FedWatch now suggests a 29.1 percent chance that the Fed will lift the rate by 25 basis points, to between 5.5 percent to 5.75 percent at its next policy meeting in November, with the odds for a December hike pegged at 36.4 percent.

In late New York trading, the euro was up to 1.0686 U.S. dollars from 1.0677 dollars in the previous session, and the British pound fell to 1.2362 U.S. dollars from 1.2391 dollars in the previous session.

The U.S. dollar bought 147.9800 Japanese yen, higher than 147.8450 Japanese yen of the previous session. The U.S. dollar decreased to 0.8969 Swiss francs from 0.8982 Swiss francs, and it decreased to 1.3437 Canadian dollars from 1.3442 Canadian dollars. The U.S. dollar decreased to 11.0915 Swedish krona from 11.1520 Swedish krona.

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