The central bank’s hawkish monetary policy approach that led to four rate hikes in 2018 proved a continuous engine for dollar strength last year, in particular as other developed world central banks were not yet tightening policy, or not to the same extent.
“The rhetoric since the December forecasts ha changed dramatically. Today’s meeting is about realigning the two. This means that growth and inflation forecasts will be lowered,” said Marc Chandler, chief market strategist at Bannockburn Global Forex, before the update.
The ICE U.S. Dollar Index DXY, -0.58% , which had been up 0.1% ahead of the central bank’s statement, dropped 0.6% to 95.792, touching its lowest level in more than six weeks, according to FactSet.
The euro EURUSD, +0.6166% the greenback’s biggest rival, shot higher on the dollar’s weakness, last buying $1.1442, compared with $1.1353 late Tuesday.
“The rhetoric since the December forecasts ha changed dramatically. Today’s meeting is about realigning the two. This means that growth and inflation forecasts will be lowered,” said Marc Chandler, chief market strategist at Bannockburn Global Forex, before the update.
The ICE U.S. Dollar Index DXY, -0.58% , which had been up 0.1% ahead of the central bank’s statement, dropped 0.6% to 95.792, touching its lowest level in more than six weeks, according to FactSet.
The euro EURUSD, +0.6166% the greenback’s biggest rival, shot higher on the dollar’s weakness, last buying $1.1442, compared with $1.1353 late Tuesday.
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