While you were sleeping: US dollar rebounds

Wall Street declined, while the US dollar regained its footing following Wednesday’s tumble, as investors reposition in the wake of the Federal Reserve’s latest comments on interest rates.

On Wednesday Fed policy makers indicated that interest rates would probably rise more gradually when increases begin as they moderated their outlook for US economic growth, though also predicted a stronger US jobs market ahead.

In afternoon trading on Wall Street, the Dow Jones Industrial Average fell 0.53 percent, while the Standard & Poor’s 500 Index slid 0.39 percent. The Nasdaq Composite Index added 0.25 percent.

The US dollar strengthened, gaining 2 percent against the euro, bouncing back from the previous day’s hectic selling.

Still, some predict the US currency’s upward momentum will soon run out of steam now that the Fed has cut back its rate projections.

“The dollar rally is nearing its end,” David Bloom, HSBC’s global head of currency strategy, wrote in a report Thursday, Bloomberg reported. “The dollar bull needs feeding and new factors challenge the consensus view that the dollar can extend in a sustained way.”

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