News: FOREX-Dollar slips as Fed outlook shifts

	  Fed drops some hawkish rhetoric 

	  Dollar down broadly, euro leads gains 

	  Some losses pared after Yellen remarks 

The dollar was under pressure near seven-week lows on Thursday as U.S. bond yields fell sharply after the Federal Reserve sounded close to calling time on interest rate hikes.

The Fed raised its benchmark funds rate by 25 basis points, as expected, but dropped language about "ongoing increases" being needed in favour of "some additional" rises, as it waits and watches how wobbling confidence in banks affects the economy.

Futures 0#FF: imply only an even chance of one more hike. That's a contrast to Europe where markets see another 50 bp or so to go, and the gap sent the euro EUR=EBS surging.

The dollar pared some of its losses when U.S. Treasury Secretary Janet Yellen set off another round of bank stock selling and jitters over stability by telling Congress she hasn't considered or discussed blanket insurance for deposits.

The euro strengthened as much as 1.3% to its highest since early February at $1.0912, though by the Asian morning it had dropped back to bought $1.0872.

Sterling GBP=D3 also shot to a seven-week high as British inflation unexpectedly rose, leaving it at an eye-watering 10.4% and heaping pressure on the Bank of England to raise rates and sound hawkish at its meeting later in the day.

Dollar/yen JPY=EBS fell 0.7% overnight and was edging lower in the Asian morning at 131.19. Two-year Treasury yields US2YT=TWEB fell 22 bps on Wednesday. FEDWATCH

The shift in tone from the Fed makes it less likely that markets return to worrying that strong economic data is going to lead to more and more rate hikes, said NatWest Markets head of G10 FX strategy Brian Daingerfield.

"From the foreign exchange perspective, we think that argues for further dollar weakness as the ceiling for the Fed cycle has clearly come down."

Financial markets have been roiled by wavering confidence in banks globally following a run on Silicon Valley Bank two weeks ago and the sudden demise of Credit Suisse.

The risk-sensitive Australian dollar AUD=D3 recoiled sharply from a two-week high of $0.6759 to be back at $0.6707 on Thursday morning.

The New Zealand dollar NZD=D3 also gave up overnight gains, but was firm in morning trade at $0.6238. Sterling bought $1.2282 after rising as high as $1.2334 overnight. Markets have priced a 25bp hike from the BoE. 0#BOEWATCH

The focus on the banking front is now primarily on U.S. regional lenders where worry of a contagious run on deposits remains elevated.

Fed Chair Jerome Powell said deposit flows have stabilised in the last week, and smaller lenders said they took some comfort from Yellen's remarks that deposit insurance would be considered were there to be a contagion risk.

That "took the anxiety out of the room," according to Daniel Kimbell, an executive at the local Passumpsic Bank in St Johnsbury, Vermont.

Bitcoin BTC=BTSP fell 3% to $27,360 after a series of U.S. Securities and Exchange Commission lawsuits over crypto promotion put a dampener on digital assets.

	======================================================== 
	Currency bid prices at 0050 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS																	   

							  $1.0875		 $1.0856	+0.16%		  +1.47%	  +1.0876	 +1.0854 
																								 
 Dollar/Yen		JPY=EBS																	   

							  131.0750		131.3900   -0.18%		  +0.00%	  +131.4550   +131.1600 
																								 
 Euro/Yen		 
				  S>		  142.56		  142.67	 -0.08%		  +1.61%	  +142.7900   +142.4500 
																								 
 Dollar/Swiss	  CHF=EBS																	   

							  0.9168		  0.9175	 -0.07%		  -0.84%	  +0.9173	 +0.9166 
																								 
 Sterling/Dollar   GBP=D3																		

							  1.2285		  1.2269	 +0.11%		  +1.56%	  +1.2287	 +1.2266 
																								 
 Dollar/Canadian   CAD=D3																		

							  1.3708		  1.3732	 -0.17%		  +1.18%	  +1.3733	 +1.3707 
																								 
 Aussie/Dollar	 AUD=D3																		

							  0.6707		  0.6685	 +0.35%		  -1.59%	  +0.6708	 +0.6682 
																								 
 NZ				NZD=D3																		

 Dollar/Dollar				0.6238		  0.6222	 +0.27%		  -1.75%	  +0.6239	 +0.6221 
																								 
																								 
	 
All spots  FX=  
Tokyo spots  AFX=  Europe spots  EFX=   Volatilities  FXVOL=   Tokyo Forex market info from BOJ  TKYFX  
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World FX rates	https://tmsnrt.rs/2RBWI5E 

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