Dollar tumbles on Fed's dovish hold

The greenback fell sharply in New York and ended broadly lower against a majority of its peers, except versus sterling, on Wednesday as the Federal Reserve kept its interest rate unchanged but ruled out prospects of further rate hikes this year due to a slowdown in the economy. Sterling tumbled to a 6-day low after UK PM May requested short Brexit delay.  
  
Reuters reported Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent. The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective as the most likely outcomes. In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.   
  
Versus the Japanese yen, although dollar jumped to session highs at 111.69 in Asian morning on cross-selling in jpy, price met renewed selling and later fell to 111.38 in New York morning and then tumbled to a 20-day low at 110.54 after Fed's dovish hold.  
  
The single currency went through a roller-coaster ride. Although euro retreated to 1.1343 in Asian morning, then ratcheted lower to session lows at 1.1336 in European morning, renewed buying emerged and pushed price higher to 1.1366 at New York open. Despite weakening to 1.1347, the pair rallied to a 6-week high at 1.1448 on usd's broad-based weakness.  
  
The British pound went through a volatile session. Cable met renewed selling at 1.3275 in Australia and dropped to 1.3253 in Asian morning and then ratcheted lower to 1.3213 in European morning on news that UK PM May will request EU for a short delay to Brexit. Despite recovering to 1.3253 ahead of New York open on slightly upbeat UK CPI data, the pair fell sharply to session lows at 1.3147 at New York open before staging a strong rebound to 1.3250 on dollar's weakness in post-FOMC trading.  
Reuters reported British Prime Minister Theresa May on Wednesday asked the European Union to delay Brexit until June 30.   
  
"I am... writing to inform the European Council that the UK is seeking an extension to the Article 50 period... until 30 June 2019," May said in a letter to European Council President Donald Tusk.   
May said she wanted an orderly exit from the EU and that she intended to bring her twice-defeated divorce deal back to parliament, though she didn't say when.   
Reuters reported UK consumer prices rose at an annual rate of 1.9 percent in February after a 1.8 percent increase in January, the Office for National Statistics said. A Reuters poll of economists had pointed to a rate of 1.8 percent.  
  
In other news, Reuters reported U.S. President Donald Trump said on Wednesday a trade deal with Beijing is coming along, with U.S. trade negotiators going to China soon.   
Trump, speaking to reporters at the White House, said his administration is talking about leaving tariffs on China for a long period of time. Trump has said the threat of tariffs makes Beijing eager to reach a deal.   
  
Data to be released on Thursday :  
  
New Zealand GDP, Japan market holiday, Australia employment change, unemployment rate, Swiss interest rate decision, UK retail sales, BoE MPC vote hike, BoE MPC vote unchanged, BoE MPC vote cut, BoE interest ratre decision, BoE QE total, BoE QE corporate bond purchases, Canada ADP employment change, U.S. initial jobless cliams, Philadelphia Fed survey, leading indicator, and EU consumer confidence.