Fed drops some hawkish rhetoric Dollar down broadly, euro leads...

	  Fed drops some hawkish rhetoric 

	  Dollar down broadly, euro leads gains 

The dollar was under pressure near seven-week lows on Thursday after the U.S. Federal Reserve sounded close to calling time on interest rate hikes, which markets think are more or less over.

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 watches how wobbling confidence in banks affects the economy.

Futures 0#FF: imply only an even chance of one more hike, in contrast to Europe where markets see another 50 bps or so to go. The gap has sent the euro EUR=EBS surging, with it touching a seven-week high of $1.0912 on Wednesday and coming close to testing it again at $1.0898 in the Asia session.

Sterling GBP=D3 also hovered near 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.

Markets have priced a 25-bp hike from the BoE. 0#BOEWATCH Traders also expect a 50 bp hike at the Swiss National Bank, which has the franc CHF=EBS recovering from a slide it suffered at troubles at Credit Suisse had traders nervous.

The shift in tone from the Fed makes it less likely that markets go back to worrying that strong economic data drives rates higher, 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."

The dollar had earlier found a footing when U.S. Treasury Secretary Janet Yellen spooked markets by telling Congress she has not considered or discussed blanket bank deposit insurance.

But that mostly reversed in Asia. The Australian and New Zealand dollars rose 0.7% and 0.8% respectively to track back toward Wednesday's peaks. Dollar/yen, which closely follows U.S. yields, fell 0.7% to a six-week low of 130.50. Two-year U.S. Treasury yields US2YT=RR fell 11 bps, extending a drop of about 20 bps on Wednesday.

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 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. Regional lenders shares, however, fell.

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

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	Currency bid prices at 0335 GMT 

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

							  $1.0897		 $1.0856	+0.40%		  +0.00%	  +1.0905	 +1.0854 
																								 
 Dollar/Yen		JPY=EBS																	   

							  130.5650		131.3900   -0.70%		  +0.00%	  +131.4550   +130.4700 
																								 
 Euro/Yen		 
				  S>		  142.31		  142.67	 -0.25%		  +0.00%	  +142.7900   +142.2000 
																								 
 Dollar/Swiss	  CHF=EBS																	   

							  0.9154		  0.9175	 -0.22%		  +0.00%	  +0.9173	 +0.9151 
																								 
 Sterling/Dollar   GBP=D3																		

							  1.2316		  1.2269	 +0.41%		  +0.00%	  +1.2324	 +1.2266 
																								 
 Dollar/Canadian   CAD=D3																		

							  1.3676		  1.3732	 -0.41%		  +0.00%	  +1.3733	 +1.3664 
																								 
 Aussie/Dollar	 AUD=D3																		

							  0.6729		  0.6685	 +0.67%		  +0.00%	  +0.6735	 +0.6682 
																								 
 NZ				NZD=D3																		

 Dollar/Dollar				0.6270		  0.6222	 +0.78%		  +0.00%	  +0.6276	 +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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