The dollar stayed on the front foot on Thursday, holding near prior session highs as it basked in the afterglow of the Federal Reserve’s optimistic take on the U.S. economic recovery, raising the odds of policy tightening sooner rather than later.
The Federal Open Market Committee released a statement after its two-day meeting that underscored the improving U.S. labor market, but said interest rates would remain low for a “considerable time.”
The statement largely dismissed recent financial market volatility, European growth challenges and a weak inflation outlook. The central bank ended its monthly bond purchase program as widely expected, pushing up U.S. yields and increasing the greenback’s appeal.
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