Dollar slips lower vs. rivals in quiet trade

The dollar slipped lower against a basket of other major currencies on Friday, as the Federal Reserve’s latest policy statement still left the greenback vulnerable and as trading volumes were expected to remain light with no major U.S. data to be released throughout the day.

The dollar remained fragile after the Fed indicated on Wednesday that U.S. economic growth has moderated and that interest rates will rise at a slower pace than previously forecast.

In a statement following its monetary policy meeting, the U.S. central bank also downgraded its forecasts for growth and inflation.

The Fed dropped a reference to being “patient” on the timing of rate hikes, but added that the change in its forward guidance did not mean it has decided on the timing for an initial rate increase.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.20% to 99.25.

The euro edged higher, with EUR/USD up 0.35% to 1.0695 after European Union leaders said earlier Friday that Greece has agreed to establish a new reform plan in the coming days to secure the additional bailout funds required to prevent the country’s bankruptcy.

Ahead of the talks, European Parliament President Martin Schulz had warned that Greece’s financial situation was “dangerous”, with debt payments looming.

The pound held steady, with GBP/USD at 1.4750 after the U.K. Office for National Statistics said that public sector net borrowing rose by £6.22 billion in February, less than the expected increase of £7.70 billion.
January’s figure was revised to a £8.93 billion drop from a previously estimated decline of £9.41 billion.
Elsewhere, the dollar was higher against the yen, with USD/JPY rising 0.23% to 121.08 and lower against the Swiss franc, with USD/CHF slipping 0.27% to 0.9875.

The minutes of the Bank of Japan’s most recent policy meeting earlier showed that government dropped their calls to hit the bank’s inflation target “at the earliest date possible,” signaling to the BoJ that it shouldn’t rush in accelerating inflation through expanding stimulus measures further.

Meanwhile, the Australian, New Zealand and Canadian dollars were broadly stronger, with AUD/USD adding 0.28% to 0.7671 and NZD/USD gaining 0.40% to 0.7444, while USD/CAD edged down 0.18% to 1.2694.

Source: investing.com

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