By Gina Lee
Investing.com – The dollar was down on Thursday morning, edging towards two-year low and reversing some earlier gains after the U.S. Federal Reserve stuck to a widely-expected script as its two-day meeting concluded on Wednesday.
The Fed kept interest rates near zero and vowed to use all available tools to support the recovery from the most severe economic downturn “in our lifetime”, Fed Chairman Jerome Powell said at a virtual press conference on Wednesday. The Fed also tied economic recovery to an end to the COVID-19 pandemic, with Powell warning that there are signs that increases in the number of COVID-19 cases are starting to weigh on economic activity.
But some investors were already looking ahead to Fed meetings scheduled for later in the year, when bigger changes to the Fed’s strategy could be unveiled.
"We think September and November meetings will be more eventful, with the (Federal Open Market Committee) expected to conclude its framework review in September and then amend its forward guidance and possibly adjust its inflation-targeting strategy," Mike Swell, head of Global Fixed Income Portfolio Management, Goldman Sachs (NYSE:GS) Asset Management, told Reuters.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies was down 0.15% to 93.295 by 11:20 PM ET (4:20AM GMT). The dollar been on a days-long retreat over expectations that the Fed will continue its current monetary policy, and on speculation that it will allow inflation to run higher than it has previously indicated before raising interest rates.
The USD/JPY pair was up 0.11% to 105.03.
The AUD/USD pair was down 0.03% to 0.7184 and the NZD/USD slid 0.17% to 0.6656.
The USD/CNY pair fell 0.06% to 6.9970 and the GBP/USD pair was down 0.03% to 1.2991.
Meanwhile, Republicans and Democrats continue debates over the country’s latest stimulus measures. Investors will be looking to see whether the two sides can finally reach an agreement, with one day left before some earlier stimulus measures expire on Friday.