Dollar drops as Fed cuts rates by half a percentage point

NEW YORK : The dollar dropped after the Federal Reserve on Wednesday cut interest rates by half a percentage point, citing greater confidence that inflation will continue to recede to the U.S. central bank's 2 per cent annual target.

The Fed cut the overnight rate to the 4.75 per cent-5.00 per cent range and policymakers see the Fed's benchmark rate falling by another half of a percentage point by the end of this year, another full percentage point in 2025, and by a final half of a percentage point in 2026 to end in a 2.75 per cent-3.00 per cent range.

The dollar index was last down 0.46 per cent on the day at 100.45, the lowest since July 2023. The euro gained 0.46 per cent to $1.1164. The greenback weakened 0.86 per cent to 141.17 Japanese yen.

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