In a widely expected move, the Federal Reserve kept interest rates unchanged on Wednesday,
which analysts said should add stability to global currencies.
The dollar has been firm against most major currencies of late and that should bode well for importers and exporters who abhor uncertainty.
“Job gains were solid, on average, in recent months, and the unemployment rate declined,” the central bank wrote in its statement. “Household spending rose only modestly, but the fundamentals underpinning the continued growth of consumption remained solid. Business fixed investment firmed.”
A key measure of inflation, the core Consumer Price Index, rose 2 percent year-over-year in March. In its statement, the Fed noted that “inflation will stabilize around 2 percent over the medium term.”
On Wednesday, the euro was trading at .92 to the dollar, after bouncing back and forth a bit in recent weeks in reaction to U.S. government budget talks and the volatile first round of French elections, analysts have noted. Longer term, the dollar-euro exchange rate is unchanged over the last three months.
Meanwhile, the Japanese yen has been somewhat bearish of late, as the country’s economy shows some stability amid a long-term struggle. The yen has had a long-term slide against the dollar, but has bounced back a bit and on Wednesday was trading at 112.35 yen to the dollar. In the previous quarter, the yen stood at 113.4 versus the dollar.
The Canadian dollar weakened on Tuesday to a 14-month low against its U.S. counterpart, faced with an uncertain trade outlook and lower oil prices. At midday, the Canadian dollar was trading at 72.94 U.S. cents.
In other key currencies, the Chinese yuan was trading 6.89 yuan to the dollar on Wednesday, compared to 6.55 at in February; while the Indian rupee was trading at 64.15 to the dollar compared to 66.62 in the same time period.