U.S. Dollar Falls From Two-Year High

Investing.com - The U.S. dollar fell back slightly from a two-year high after the excitement of the Federal Reserve's wait-and-see approach wore off.

The Fed cut rates by 25 basis points on Wednesday, the first cut in a decade, but indicated it would not be aggressive on its approach to monetary policy.

Fed Chairman Jerome Powell called the cut a small correction and “not the beginning of a long series of cuts.”

“You would do that if you saw real economic weakness ... That’s not what we’re seeing,” he said during his press conference.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was up 0.1% to 98.382 by 11:03 AM ET (15:03 GMT) after reaching an earlier high of 98.665.

The dollar was higher against the Japanese yen, with USD/JPY falling 0.5% to 108.19.

Sterling was still in the red, with GBP/USD down 0.1% to 1.2143, after the Bank of England kept rates steady. The bank voted unanimously to keep the rate at 0.75%, as expected, but downgraded its projections for growth for the next two years.

The BoE did not warn against a no-deal scenario, but did say that "companies expect output, employment and investment to be much lower in a no-deal Brexit."

The pound lost more than 4% in July on fears of a hard Brexit, as newly elected Boris Johnson has insisted that the U.K. will leave the European Union on October 31 with or without a deal.

Elsewhere, EUR/USD was down 0.1% to 1.1058, and USD/CAD rose 0.2% to 1.3209, while USD/MXN was up 0.3% to 19.1852.

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