The US dollar tumbled against major currencies following the announcement of Fed's interest rate decision in New York afternoon deals on Tuesday. The Federal Reserve once again left its benchmark interest rate unchanged on Tuesday, with the central bank still seeing a weak economy as a bigger threat than inflation. The Fed also continued to predict that rates would remain low "for an extended period."
The Federal Open Market Committee, the policy-making arm of the Fed, voted to leave the target range for the federal funds rate at zero to a quarter percent. This historically low interest rate has been maintained since December 2008.
The Fed stated that the economy has continued to strengthen over the past several weeks, with signs of stabilization in the labor market.
However, the central bank warned that high unemployment and lower housing wealth, combined with income growth that is modest and credit that remains tight, are holding the recovery back.
Extending morning session downtrend, the greenback declined further against major European opponents in afternoon deals today. At present, the greenback is trading near new multi-day low of 1.3780 against the euro, fresh multi-week lows of 1.0541 versus the Swiss franc and 1.5261 against the British pound, compared to yesterday's closing values of 1.3679, 1.0621 and 1.5059, respectively.
The greenback ticked down against the Australian dollar and the New Zealand dollar in today's afternoon session. The greenback is currently trading near a new multi-day low of 0.9191 versus the Aussie and a fresh multi-week low of 0.7106 versus the kiwi from Monday's close of 0.9149 and 0.7018, respectively.
The US currency also plummeted against its Canadian counterpart in New York afternoon deals and dropped to a new multi-month low of 1.0138 by about 2:30 pm ET.
Oil prices reversed the previous session's losses and closed higher Tuesday, as the dollar slid against its European counterpart. Light, sweet crude oil for delivery in April settled $1.90 higher at $81.70 per barrel in the New York Mercantile Exchange, after losing 2.8% in the previous two sessions.
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