USD Drops Following Release of Federal Reserve Statement

The U.S. Dollar (USD) fell sharply following the release of the Federal Reserve policy statement, after moving within in a tight range, mostly in the positive territory, ahead of the release of the statement and the first quarterly expectations for the American economy this year.

With many investors looking to hear signals about a possible rise in interest rates or a change in the current pace of the asset purchase program, the Fed reiterated its commitment to maintain interest rates unchanged most likely until 2023.

The Dollar Index (DXY), which measures the greenback’s performance against a basket of six major international currencies, went as low as 91.38 following the meeting, after touching a high of 92.00 earlier in the day and maintaining its level above 91.80 ahead of the meeting.

DXY is now down by 0.49% at 91.41.

Earlier this month, Fed Chair Jerome Powell said that a rise in inflation in the coming period, which now the Fed projects will reach 2.4% this year, will not impose enough pressure to raise interest rates, noting that policymakers will be patient with any transitory increases in inflation.