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This Might Be the Dollar Disaster Bears Have Waited For

  • Dollar plunges by the most since January on Fed’s surprise
  • Further losses may hinge on economies outside U.S. perking up
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Powell speaks about the decision by the Federal Open Market Committee.(Source: Bloomberg)
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The Federal Reserve’s big surprise could spell disaster for dollar bulls.

The Bloomberg dollar index tumbled 0.5 percent on Wednesday, making it the worst day since January, after Fed policy makers unexpectedly signaled they’d hold their rates benchmark steady all year because of troubling signs from the economy. Among other problems, that could undermine the currency’s appeal by cutting into any yield advantage on dollar-denominated assets.