The dollar nursed hefty losses on Thursday, having suffered its biggest one-day fall against the euro in six years after the Federal Reserve struck a much more dovish than expected tone on interest rates while highlighting the currency’s drag on U.S. exports.
As expected, the Fed dropped the word “patient” from its statement in terms of raising interest rates, but it also downgraded its views on the economy and inflation and lowered its interest rate trajectory. That signaled a far more gradual path to policy normalization than many investors had expected.
Against the yen, the greenback slid as low as 119.29 overnight, its lowest since Feb. 27, trading below 120.00 for the first time in nearly three weeks. It recovered some ground to last stand at 120.13 yen, slightly higher on the day.
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