The dollar turned lower against the euro Wednesday, erasing gains it made earlier in the day, after the Federal Reserve said that it is unlikely to raise interest rates before late 2014.
Lower interest rates tend to weigh on a currency by reducing the returns investors get from holding it. The central bank has kept interest rates near zero since cutting them during the financial crisis in December 2008. Keeping rates low is a sign that the Fed thinks the economy still needs help in order to recover.
The Fed also forecasted slightly lower growth in 2012 but said the unemployment rate could fall.
The euro rose to $1.3084 in late trading Wednesday from $1.3021 late Tuesday.
The dollar was also lower against most other currencies around the world.
The British pound rose to $1.5643 from $1.5603. The dollar fell to 0.9231 Swiss franc from 0.9286 Swiss franc and to 1.0074 Canadian dollar from 1.0101 Canadian dollar.
But the dollar rose to 77.81 Japanese yen from 77.73 Japanese yen after Japan posted its first annual trade deficit since 1982