The dollar weakened, pushing a gauge of the currency to a seven-month low, along with the yen as the Federal Reserve’s unexpected hold in monetary policy sent stocks higher and damped demand for haven currencies.
The dollar traded near the weakest since February against the euro after Fed policy makers maintained monthly bond purchases at $85 billion. The yen slid against all its major peers after a Bank of Japan policy maker said pressure may mount to expand on unprecedented monetary stimulus. New Zealand’s dollar rose after data showed the nation’s economy accelerated, while Thailand’s baht surged the most since 2007.
“You’ve got the go with the flow — you’ve got to buy risk currencies, risk assets,” Mitul Kotecha, the global head of foreign-exchange strategy at Credit Agricole SA (ACA) in Hong Kong, said in a Bloomberg Television interview today. “Perhaps we’ve seen a delay in the recovery in the dollar because of Fed delaying tapering, but the reality is that the Fed will taper going forward.”
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