The dollar fell the most in four weeks against the currencies of six major trading partners after the Federal Reserve said it will pump more money into the U.S. financial system to spur inflation and employment.
The greenback slid versus 15 of its 16 major counterparts after the Fed said it will buy $600 billion of U.S. Treasuries through June. It pared losses after data yesterday showed payrolls grew more than forecast. The Australian and Canadian currencies reached parity with the dollar as investor appetite for higher-yielding assets rose before leaders of the Group of 20 nations discuss currency policy in Seoul next week.
“The global market dynamic is still supporting dollar weakness,” said Sacha Tihanyi, a currency strategist at Bank of Nova Scotia in Toronto, Canada’s third-largest lender. “The Federal Reserve’s statement may be favorable for the U.S. economy, but it’s unfavorable for the U.S. dollar.”