Wall Street stocks were lower in morning trade today (March 19th) as the dollar recouped some of yesterday's losses. At 10:15 ET, the Dow Jones industrial average was down 0.3 per cent, to 18,014, while the Standard & Poor's 500 fell 0.2 per cent, to 2,094.
The dollar tumbled yesterday when the US Federal Reserve dropped its "patient" language from the policy statement, and trimmed its growth and inflation forecasts, sending a dovish message to markets that it is in no hurry to raise interest rates any time soon. It also said unemployment could fall further than first thought without risking a spike in inflation.
"The big surprise yesterday was that the Fed acknowledged the negative impact stemming from the strong US dollar," Chang Wei Liang of Mizuho Bank in Singapore told AP.
Euro/dollar parity achievable
The euro rose $1.09 (£0.74) against the dollar, from $1.06 before the Fed statement yesterday. Against the Swiss franc, it posted its worst daily performance since January 15th.
However, this morning, the dollar was back to $1.0684. Against the Japanese yen, it was trading at 120.74 yen.
Richard Franulovich, senior currency strategist at Westpac in New York, told Reuters that the Fed's dovish statement was an excuse to sell lopsided positions on the dollar but he added that the greenback is still a good bet in the medium term.
"The Fed is less supportive of the dollar, but the dollar's bull trend is built on more than just the Fed," he said. "I still think parity with the euro is still achievable. It's difficult to see the euro gain any momentum with the ECB buying $3 billion in bonds every day and Greece is still unresolved."
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