02.11.201623:37:00UTC+00Dollar Weakens as Fed Kept Rates Unchanged

The dollar trimmed losses after the U.S. Federal Reserve indicated a possibility of an interest-rate hike in December, however uncertainty regarding the U.S. presidential election weighed on the currency. The WSJ Dollar Index fell 0.3 percent.

The Fed kept short-term interest rates unchanged however it did indicate that it expects to increase rates by year-end. The statement of the Fed stated that inflation is strengthening and also implied that the bar to raising rates for the first time in a year is low. Fed-funds futures have shown that investors implied a 72 percent chance of a rate hike in December, according to CME Group data.

The dollar was lower against a basket of major currencies, led by the rand and the kiwi. The euro was stable at $1.1094. The Mexican peso fell 0.9 percent against the greenback. The Japanese yen climbed by nearly 0.6 percent and the Swiss franc rose by almost 0.1 percent against the dollar. Investors watch U.S. data for indications that the economy is firm enough for a rate hike by year-end.

The dollar index last traded at 97.404, after declining to as low as 97.178, its lowest since Oct 11.