The dollar fell broadly on Wednesday and with just one more day left in March headed for its worst quarter in five years against a basket of currencies, as investors wound back their expectations for U.S. interest rate rises in 2016.
The Australian and New Zealand dollars, currencies that are closely correlated with commodity prices, both soared to nine-month highs as oil prices — which are U.S. dollar-denominated — rose and became cheaper for holders of other currencies.
The greenback had hit a two-week high against a basket of major currencies at the start of the week, boosted by a series of hawkish comments from Fed officials that gave investors the impression that U.S. interest rates could increase twice this year, with the first hike coming as soon as April.
But Fed Chair Janet Yellen poured cold water on those expectations on Tuesday, stressing the need to be cautious in raising rates and highlighting external risks including low oil prices and slower growth abroad.
