The dollar tumbled across the board on Wednesday after the Federal Reserve signaled an interest rate increase as early as June but slashed interest-rate projections over the next few years and downgraded its outlook for the U.S. economy.
The greenback fell about 3 percent against the euro, bringing it back above $1.10, in the wake of the Fed’s statement. The euro’s daily gain against the dollar was its largest since March 2009, with trading volume at the highest since February 2012. The euro zone common currency had dropped below a $1.05 for the first time in 12 years earlier this month.
The dollar fell to three week-troughs against the yen and was last at 119.80 yen, down 1.2 percent. It was headed for its worst day versus the yen since Dec. As expected, the U.S. central bank dropped the word “patient” from its statement in terms of raising interest rates, but lowered its economic and inflation outlook for this year and sharply cut its projected interest rate path for the U.S. economy.
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