Fed’s gloomy outlook prompts rush for dollar

Fed's gloomy outlook prompts rush for dollar

The dollar steadied against risk currencies, while the yen hit a one-month peak on Thursday as the U.S. Federal Reserve reported a gloomy economic outlook.

The Australian dollar fell from an 11-month high to $0.6966. The New Zealand dollar also broke its near-five-month high after falling 0.3% to $0.6516.

The safe-haven yen rose to 106.90, its highest since May. The euro hit a three-month high of 1.1382 on the dollar and the pound stood at $1.2738.

Fed policymakers forecasted the U.S. economy to contract by 6.5% this year, with unemployment standing at 9.3% at year’s end.

The gloomy outlook prompted investors to rush to bonds and to the dollar.

Powell also said that the Fed was considering yield curve controls and pressing 10-year yields to below 0.8%.

The dollar index last stood at 96.050.

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