* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, June 11 (Reuters) - The dollar rose on Thursday from
a three-month low which it hit in the previous session, as
expectations that the global economy will recover swiftly from
the coronavirus pandemic took a beating after a U.S. central
bank policy meeting.
The Federal Reserve signaled it plans years of extraordinary
support for the U.S. economy, which policymakers projecting it
will shrink by 6.5% in 2020 and that the unemployment rate will
be 9.3% at the end of this year, and expects interest rates
expected to remain near zero until the end of 2022. The dire projections took the wind out of a broadening rally
in the stock markets over the previous two weeks and sent
investors scurrying to the relative safe-haven appeal of the
greenback, yen and the Swiss franc.
Against a basket of its rivals =USD , the dollar edged 0.2%
higher to 96.3, recovering from a three-month low overnight as
Asian stocks weakened and U.S. stock futures fell more than 1%.
Market sentiment also took a hit as new coronavirus
infections in the United States showed a slight increase after
five weeks of declines, according to a Reuters analysis, only
part of which was attributed to more testing.
"The risk of a second wave outweighed the Fed's 'zero
forever' message and the FX market took a distinctly risk-off
mood, with a typical reaction," said Marshall Gittler, Head of
Investment Research at BDSwiss Group.
High-beta currencies heavily geared towards global growth,
such as the Australian dollar AUD=D3 and the Norwegian crown,
NOK=D3 led losers in the currency space, falling 1% in early
London trading.
"That's been the follow-through, and it's played into a
broad rebound in the dollar," said Rodrigo Catril, FX analyst at
National Australia Bank in Sydney.
The euro put up the best fight of the majors, sliding only
0.2%, leaving open the possibility of more downside for the
dollar once the dust settles. The single currency EUR=EBS last
bought $1.1355.