The dollar got off to a weak start against its major rivals Wednesday, but has bounced back this afternoon following the release of the Federal Reserve's policy statement.

The Federal Reserve on Wednesday raised its key interest rate by a quarter point to 2%, as expected.

In a surprise move, the central bank now projects four interest rate hikes in 2018, rather than three. The Fed also dropped wording about rates being 'below levels" in the long run.

Reflecting a sharp jump in energy prices, the Labor Department released a report on Wednesday showing a bigger than expected increase in U.S. producer prices in the month of May. The Labor Department said its producer price index for final demand climbed by 0.5 percent in May after inching up by 0.1 percent in April. Economists had expected producer prices to rise by 0.3 percent.

The dollar dropped to a low of $1.1792 against the Euro Wednesday, but has since rebounded to around $1.1750.

Eurozone industrial production decreased in April after recovering in the previous month, data from Eurostat showed Wednesday. Industrial output fell 0.9 percent month-over-month in April, reversing a 0.6 percent increase in March, which revised up from 0.5 percent.

Eurozone employment grew at a slightly faster pace in the three months ended March, data from Eurostat showed Wednesday. Employment rose 0.4 percent sequentially in the March quarter, just above the 0.3 percent increase in the previous month. There were 157.2 million employed in the euro area.

The buck fell to a low of $1.3389 against the pound sterling Wednesday, but has since bounced back to around $1.3335.

UK inflation remained stable in May, the Office for National Statistics reported Wednesday. Consumer price inflation held steady at 2.4 percent, the lowest since March 2017, and in line with expectations.

British house price inflation eased further in April to the lowest level in just over a year, figures from the Office for National Statistics showed Wednesday. The house price index climbed 3.9 percent year-over-year in April, slower than March's 4.2 percent rise.

The greenback dipped to a low of Y110.336 against the Japanese Yen Wednesday, but has since climbed to around Y110.730.

by P2PNews Staff Writer

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