NEW YORK, New York - The U.S. dollar fell sharply on Wednesday as the Federal Reserve signalled it is moving towards cutting interest rates.
The U.S. central bank on Wednesday left interest rates unchanged as expected but said the case for lower rates was growing, hinting it could cut rates due to weakness in the economy, stubbornly low inflation and heightening trade tensions.
"Even though the market had anticipated much of what the Fed said, the dollar's fall was still a relatively large one," Daisuke Karakama, chief market economist at Mizuho Bank told the Reuters Thomson news agency on Wednesday.
"The main question is no longer if the Fed will cut rates in July, but whether the easing will be by 25 or 50 basis points."
The dollar tumbled against the Japanese yen, which rose to 107.64.
The euro jumped sharply to 1.1257, while the British pound put on 0.70% to 1.2676.
The Swiss franc firmed to 0.9902. The Canadian dollar spiked significantly higher to 1.3252, gaining more than a full cent.
The Australian dollar was up a quarter-of-a-cent at 0.6902, while the New Zeland dollar climbed half-a-cent to 0.6577.
Stocks rose across the board. The Dow Jones industrials advanced 38.46 polints or 0.15% to 26,504.00 Wednesday.
The Standard and Poor's 500 rose 8.71 points or 0.30% to 2,926.46.
The Nasdaq Composite appreciated by 33.44 points or 0.42% to 7,987.32.