14.06.202322:09:00UTC+00Dollar Mostly Subdued Against Major Counterparts

The U.S. dollar turned in a weak performance against its major counterparts on Wednesday despite the Federal Reserve forecasting additional increases later this year.

The Fed maintained the target range for the federal funds rate at 5 to 5.25%, marking the first time the central bank has left rates unchanged since January 2022.

Leaving rates unchanged will allow the Federal Open Market Committee the opportunity to assess additional information and its implications for monetary policy, the Fed said.

However, the central bank's latest projections suggest the Fed plans to resume raising rates later this year, forecasting a rate of 5.6% by the end of 2023.

The forecast for additional rate hikes this year comes as the Fed raised its forecast for annual core consumer price growth to 3.9% from 3.6%.

In economic releases today, the Labor Department said its producer price index for final demand fell by 0.3% in May after inching up by 0.2% in April. Economists had expected producer prices to edge down by 0.1%.

The report also showed the annual rate of producer price growth slowed to 1.1% in May from 2.3% in April. The rate of growth was expected to decelerate to 1.5%.

Meanwhile, the European Central Bank is expected to raise interest rates by 25 basis points on Thursday despite deepening fears of a recession in Europe.

The dollar index, which dropped to 102.66 ahead of the Fed's policy statement, recovered to around 103.25 later before easing to 103.02.

Against the Euro, the dollar weakened to 1.0834, from 1.0796, and against Pound Sterling, dropped to 1.2665 from 1.2615.

The dollar eased to 140.09 yen from 140.20 yen. Against the Aussie, it weakened to 0.6795. Against Swiss franc, the dollar weakened to around CHF 0.8965 before recovering to 0.9011. The dollar settled at C$1.3327 against the loonie, up slightly from the previous close of C$1.3316.