The US dollar fell to its lowest levels in four months after the Federal Reserve decided to keep interest rates at 5.25 and 5.5% during Wednesday’s meeting.
The Fed’s decision led to a decline in expectations of future interest rate hikes, which weakened demand for the dollar, which is considered a safe haven currency in times of uncertainty.
The Fed’s decision was in line with market expectations, as the head of the US central bank, Jerome Powell, noted that the historical tightening of monetary policy has come to an end and borrowing costs will fall in 2024.
Powell added that the Fed will remain vigilant for inflationary pressures, but is also ready to cut interest rates if necessary.
The US Bureau of Labor Statistics revealed on Tuesday that inflation in the United States, as measured by the change in the Consumer Price Index (CPI), fell to 3.1% year-on-year in November.
The annual inflation rate of the core CPI, which excludes volatile food and energy prices, was recorded at 4% as expected, and on a monthly basis, the CPI and the core CPI increased by 0.1% and 0.3%, respectively.
