The U.S. dollar cuts back losses from previous trade versus its major opposing currencies on Wednesday after the widely forecasted verdict of the U.S. Federal Reserve to incite a temporary interest rate hike.
Judging by the Fed fund futures, traders perceived as much as 95 percent chance of interest rates to be lifted between 1.00 and 1.25 percent. However the possibility of a rate hike for September has been depleted, with futures suggesting only 17 percent chance of an increase, lower compared to the 28 percent announced ahead Wednesday.
The U.S. dollar index slipped to its poorest level since November 2016 as the release of an unexpectedly lower retail sales figures and U.S. CPI on Wednesday. The index was previously down more than 0.4 percent at 96.618.
Looking at the greenback’s performance against the Japanese yen, the dollar slumped about 1 percent on the data release to hit 108.29 yen.
Meanwhile the euro edged higher against the greenback at $1.1251 after the announcement from the Federal Reserve.
The price of gold was shortly up before slumping on Wednesday’s close after the news regarding Fed’s judgment to lift interest rate hike one more time for 2017.
U.S. gold futures inched lower about 0.07 percent close to $1,268.60 an ounce. After U.S. Federal Reserve chair Janet Yellen spoke, futures shortly rose by 1 percent.
Retail sales and the consumer price index (CPI) only came in at 0.3 percent and 0.1 percent respectively, which is weaker than estimated. This also made the bullion pared back its declines and ended higher by 1 percent.