The dollar rose to a 14-year peak against a basket of major currencies on Thursday after the Federal Reserve boosted the number of projected interest rate hikes for 2017, rejuvenating the month-long Trump rally and knocking emerging market currencies.
The dollar index extended its overnight rally and was up 0.5 percent at 102.270. It touched 102.620, its highest since January 2003. The euro was down 0.2 percent at $1.0512 EUR= after sliding to $1.0468, a trough not seen in 21 months.
In addition to approving the much-expected increase, the FOMC also indicated a higher rate than projected back in September when it last released the quarterly look ahead. The committee now expects three rate hikes in 2017, two or three in 2018 and three in 2019.
Committee members lifted their expectations for GDP growth from 1.8 percent in 2016 to 1.9 percent, and 2.1 percent in 2017 against the previous estimate of 2.0 percent. However, 2018 remained at 2.0 percent while 2019 also was bumped up a notch, from 1.8 percent to 1.9 percent. The longer-run GDP projection remained at 1.8 percent.
Headline inflation expectations were little changed overall, with 2016 moved up from 1.3 percent in September to 1.5 percent in Wednesday's projections, but the longer-run outlook remained at 2.0 percent.
Oil prices stabilized on Thursday as a tighter market loomed in 2017 due to planned output cuts led by OPEC and Russia, after sharp declines earlier following Wednesday's U.S. interest rate increase that drove investors out of commodities.
International Brent crude oil futures were trading at $53.93 a barrel at 0753 GMT, up 3 cents from their last close.
U.S. West Texas Intermediate (WTI) crude oil futures were at $50.95 per barrel, down 9 cents from their last settlement.
Reference: Reuters,CNBC
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