* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Saikat Chatterjee
LONDON, June 11 (Reuters) - The Japanese yen and the Swiss
franc gained on Thursday 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 project will
shrink by 6.5% in 2020, that the unemployment rate will be 9.3%
at the end of this year, and that interest rates are expected to
remain near zero until the end of 2022. The dire projections took the wind out of a broadening rally
in stock markets over the previous two weeks and prompted
investors to dump the Australian dollar and other
commodity-linked currencies. MKTS/GLOB
Against a basket of its rivals =USD , the dollar weakened
0.1% to 96.04 after edging 0.2% higher in Asian trade as global
stock markets weakened.
Versus the Swiss franc, the dollar slipped to a three-month
low and it languished near a one-month low versus the yen.
"Our assessment after the FOMC's statement is that the trend
for a weaker dollar that has set in June is likely to continue
as the Fed has shown no indication that it will stop this
trend," said Thomas Flury, head of FX strategies at UBS Global
Wealth Management.
The dollar had gained previously from episodes of broader
market selling, but the U.S. currency was on the back foot on
Thursday on concerns of a second wave of coronavirus infections.
New 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.
The euro rose 0.1%, leaving open the possibility of more
downside for the dollar once the dust settles. The single
currency EUR=EBS last bought $1.1385.
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