The euro steadied after its biggest intraday rally since 2000 when bets for the currency to drop were disappointed when the Federal Reserve unexpectedly reduced its projections for U.S. interest rate increases.
The single currency rose as much as 4.2 percent on Wednesday. Hedge funds and other large speculators had increased their positions betting on the euro’s decline against the dollar to the most bearish since June 2012 in early February. The dollar tumbled the most in six years against major peers on Wednesday as the Federal Open Market Committee almost halved its median estimate for the target rate this year.
The Bloomberg Dollar Spot Index, a gauge of the currency’s performance against 10 major peers, was little changed at 1,194.92 as of 11:15 a.m. in Tokyo after slumping 1.75 percent on Wednesday, the biggest drop since the Fed announced bond purchases in March 2009. On March 13, the index reached the highest level based on closing prices going back to 2004.
The euro was down 0.2 percent to $1.0842. The yen was little changed at 120.10 per dollar, after jumping more than 1 percent in New York.
Source: Bloomberg