Dollar Falls as Fed Stance Inspires Bold Buying
NEW YORK--The dollar declined against higher-yielding currencies, as bets that interest rates will remain ultralow in the U.S. and Japan for a while prompted investors to snap up growth-sensitive assets.</br></br>The Australian dollar hit a nearly two-month high against the greenback, while the Canadian currency moved closer to parity against the dollar, which dipped as low as 1.0070 Canadian dollars, a 20-month low. The New Zealand dollar jumped as much as 1%, before relinquishing some of the gains.</br></br>"With the U.S. renewing its intention to keep U.S. rates near zero until later in the year at the earliest, combined with Japan's further loosening of policy, investors are a bit more optimistic about the outlook for the global recovery," said Joe Manimbo, a currency strategist at Travelex Global Business Payments in Washington.</br></br>The rally in riskier assets comes in the wake of the Federal Open Market Committee's policy meeting Tuesday, when it affirmed its pledge to keep interest rates low for an "extended period." The Bank of Japan also left rates unchanged and added further monetary stimulus as part of its attempt to fight deflation.</br></br>"The dovish status quo from the Fed remains the best recipe for market risk appetites and further equity-market gains," said Vassili Serebriakov, a currency strategist at Wells Fargo in New York.