2019.06.1916:51:00UTC+00Dollar Loses Ground Against Peers After Fed Statement

The U.S. dollar drifted lower against most major currencies on Wednesday after the Federal Reserve left interest rates unchanged and said it will "act as appropriate" to sustain the U.S. economic expansion amid increasing uncertainties about the outlook for the economy.

The dollar, which was down marginally till the Federal Reserve announced its policy, drifted notably lower after the rate decision. Despite regaining some lost ground subsequently, it was still down in negative territory.

The dollar index, which fell to 97.09, recovered to 97.23, still down by about 0.43% from previous close.

Against the euro, the dollar shed over 0.6%, falling to 1.1255 before recovering to 1.2228, paring half its losses.

Against Sterling, the greenback weakened to 1.2674, and was last seen hovering around 1.2650, down nearly 0.7% from previous close.

Against the Japanese yen, the dollar was down 0.3% with a unit of dollar fetching 108.10 yen, as compared to 108.44 yen late on Tuesday.

The dollar was down by about 0.1% against the aussie at 0.6883 and down 0.66% against Swiss franc at 0.9939.

The dollar was down 0.7% against the loonie at 1.3284. The Canadian currency gained ground after data showed the nation's inflation was flat in May, reducing chances for a rate cut by the Bank of Canada.

The Fed, which announced its widely expected decision to leave interest rates unchanged, said in the accompanying statement that it continues to see a sustained economic expansion, a strong labor market, and inflation near its 2% target as the most likely outcomes but noted uncertainties about this outlook have increased.

"In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion," the Fed said.

Notably, the Fed also omitted its reference to remaining "patient" when determining future changes to interest rates.

Federal Reserve Chief Jerome Powell acknowledged in his post-meeting press conference that "Many participants believe that some cut to the fed funds rate would be appropriate in the scenario they see as most likely."

The Fed revised downwards its forecasts for consumer price inflation in 2019 but left its GDP growth expectations unchanged at 2.1%.

The forecast for interest rates at the end of 2019 was also unchanged from the March meeting, while the projections now point to at rate cut in 2020.