US dollar slumps as Fed cools on rate hikes

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The dollar has fallen to an 11-week low as the US Federal Reserve cooled its hawkish tone in its interest rate decision this week.

The FOMC kept rates on hold at its latest meeting, which is its first since the inauguration of US president Donald Trump.

In December, the Fed raised rates by 25 basis points to a range of 0.5 per cent to 0.75 per cent with a unanimous vote.

“The committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate,” the committee said in its statement accompanying the decision.

Against a group of 10 peers the dollar fell to its lowest level since November 14, Bloomberg reports.

Sterling was at $1.2696 this morning with the potential to pip $1.27 later today as the Bank of England releases its inflation report and announces its monetary policy committee rates decision.