Dollar higher after Fed upgrades economic outlook
The U.S. dollar gained on Wednesday in choppy trading after the Federal Reserve kept interest rates pinned near zero and said it expects the U.S. economic recovery from the coronavirus crisis to accelerate with unemployment falling faster than the central bank expected in June.
The dollar index against a basket of currencies gained 0.07% to 93.19. The euro fell 0.41% to $1.1797.
The offshore yuan gained to 6.7426, the strongest since May 2019.
Stronger Chinese data for August on Tuesday had weighed on the greenback as investors price for the prospect that other regions will see a faster economic recovery from coronavirus than the U.S.
“I would say the biggest impulse this week was the stronger activity data for the month of August from China, and maybe a bit of ongoing optimism about the vaccine,” said Vassili Serebriakov, an FX strategist at UBS in New York.
The safe-haven Japanese yen hit a two-and-a-half month high of 104.81 against the greenback.
Japan’s new Prime Minister Yoshihide Suga pledged on Wednesday that he will do his best to protect employment while also countering the coronavirus.
Reference: CNBC
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