News: FOREX-US dollar falls, but moves off four-week lows, as Fed flags more rate rises

(Adds details on Fed decision, analyst comment, updates prices)

The U.S. dollar slid on Wednesday, but edged higher from four-week lows, after the Federal Reserve held interest rates steady but signaled that borrowing costs will increase by another 50 basis points by end-December.

The dollar index was last down 0.2% at 103.12 =USD , after hitting four-week lows earlier in the session.

The euro pared gains and was last traded at $1.0822 EUR=EBS , up 0.3%. Against the yen, the dollar fell 0.4% to 139.735 JPY=EBS .

The rate-setting Federal Open Market Committee said, in a unanimous policy statement issued at the end of its latest two-day meeting, "holding the target (interest rate) range steady at this meeting allows the committee to assess additional information and its implications for monetary policy."

U.S. central bank forecasts showed most policymakers believe they will need to tighten monetary policy further.

Officials now expect the fed funds rate to top out at 5.6% this year, implying two more 25 basis point increases in 2023, up from the 5.1% they projected in the last set of forecasts released in March.

"The slowdown of US inflation in May to 4% has provided the Federal Reserve with the confidence to pause rate hikes at the 5%-5.25% range following 10 straight rate increases since March last year," said Srijan Katyal, global head of strategy and trading services at international brokerage firm ADSS, in emailed comments.

"While there are signs that the worst of the inflationary pressures are behind us, Federal Reserve officials have made it clear that rates may yet go higher later this year if inflation remains sticky. On the other hand, if we compare it to the last time interest rates were at 5.25%, it may well be the case that rates remain here for a while."

He noted that in 2006, the fed funds rate stood at 5.25% from July 2006 to August 2007 before being cut in the wake of the global financial crisis.

Traders added to bets, now at nearly 70% the Fed will raise rates again next month after skipping a hike in June. FEDWATCH

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	Currency bid prices at 2:40PM (1840 GMT) 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	   High Bid	Low Bid 
											  Previous				   Change					
											  Session											  
 Dollar index	  =USD	   103.0400	   103.3000	-0.23%		 -0.435%	   +103.4000   +102.6600 
 Euro/Dollar	   EUR=EBS	$1.0822		$1.0793	 +0.30%		 +1.03%		+$1.0865	+$1.0774 
 Dollar/Yen		JPY=EBS	139.8250	   140.2400	-0.27%		 +6.67%		+140.2600   +139.2900 
 Euro/Yen		  EURJPY=	151.31		 151.33	  -0.01%		 +7.85%		+151.5100   +150.9300 
 Dollar/Swiss	  CHF=EBS	0.9003		 0.9053	  -0.54%		 -2.62%		+0.9060	 +0.8966 
 Sterling/Dollar   GBP=D3	 $1.2657		$1.2612	 +0.38%		 +4.68%		+$1.2699	+$1.2601 
 Dollar/Canadian   CAD=D3	 1.3329		 1.3317	  +0.08%		 -1.63%		+1.3352	 +1.3272 
 Aussie/Dollar	 AUD=D3	 $0.6791		$0.6768	 +0.33%		 -0.38%		+$0.6835	+$0.6756 
 Euro/Swiss		EURCHF=	0.9743		 0.9768	  -0.26%		 -1.54%		+0.9772	 +0.9731 
 Euro/Sterling	 EURGBP=	0.8548		 0.8556	  -0.09%		 -3.36%		+0.8561	 +0.8542 
 NZ				NZD=D3	 $0.6199		$0.6150	 +0.79%		 -2.39%		+$0.6236	+$0.6144 
 Dollar/Dollar																					 

 Dollar/Norway	 NOK=D3	 10.6600		10.6490	 +0.20%		 +8.72%		+10.7290	+10.5280 
 Euro/Norway	   EURNOK=	11.5311		11.4811	 +0.44%		 +9.89%		+11.6090	+11.4201 
 Dollar/Sweden	 SEK=	   10.7380		10.6783	 +0.49%		 +3.17%		+10.7905	+10.6463 
 Euro/Sweden	   EURSEK=	11.5700		11.5137	 +0.49%		 +3.77%		+11.5895	+11.5006