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* Dollar falls to multi-week lows against other currencies
* Euro buoyed by results of Dutch election
By Gertrude Chavez-Dreyfuss
NEW YORK, March 16 The dollar dropped to a
five-week low against a basket of currencies on Thursday, still
reeling from the previous session, when a statement from the
U.S. Federal Reserve statement failed to signal a much faster
pace of monetary policy tightening.
The U.S. currency also slid to a two-week-low against the
yen, and a five-week trough versus the euro.
The Fed on Wednesday lifted the target overnight interest
rate by 25 basis points to a range of 0.75 percent to 1.00
percent, but stuck to its original forecast of three rate
increases this year. Investors were expecting four rate hikes in
Chicago-based Ron Waliczek, managing director of
over-the-counter FX and interest rates at INTL FC Stone, said
going into Wednesday's Fed decision, the dollar had been
overdone and had been so since 2014.
If ever there was a time when the dollar would consolidate
and move lower, Wednesday provided the perfect opportunity as
the market built in expectations of a more aggressive rate-hike
pace, he said.
"Overall, I think the dollar will continue to be under some
pressure for a period of time in which the market has to digest
what the Fed is saying," Waliczek said.
In late morning trading, the dollar index fell 0.3 percent
to 100.40. It slid to as low as 100.39, its weakest level
since Feb 9. Against the yen, the dollar was down 0.1 percent at
113.29, after earlier falling to a two-week trough.
The euro rose to a five-week high against the greenback, and
was last at $1.0737, up 0.1 percent.
The single European currency was also buoyed by a Dutch
election defeat of far-right leader Geert Wilders, which eased
broader fears of a populist drift in European polls this year.
"The Dutch election result was consistent with the opinion
polling," said Bank of America G10 currency strategist Kamal
"Ultimately, the near term is going to be dominated by
French election risks. So we still see that the euro is likely
to trade lower heading into those elections," he added.
Sterling, meanwhile, rose on some surprise hints about the
chances of a rise in UK interest rates. The pound hit a
two-week high of $1.2373, after the Bank of England kept
interest rates on hold but gave a handful of hints in voting
results and its minutes that it might raise them soon.
The pound was last up 0.6 percent at $1.2360.
(Additional reporting by Ritvik Carvalho in London; Editing by