NEW YORK, Dec. 13 (Xinhua) — The U.S. dollar suffered substantial losses on Wednesday, following the Federal Reserve’s release of new economic projections suggesting a potential shift toward looser monetary policy.

The dollar index, which measures the greenback against six major peers, dived 0.96 percent to 102.8694 in late trading.

The Fed decided to hold rates steady at the 5.25 percent to 5.50 percent range as expected on Wednesday, and no Federal Open Market Committee (FOMC) officials saw rates higher by the end of next year. Regarding inflation projections, Fed officials saw inflation at 2.4 percent in 2024, returning to the 2 percent target in 2026.

Moreover, 17 of 19 Fed officials projected that the policy rate would be lower by the end of 2024 than it is now, with the median projection showing the rate falling three-quarters of a percentage point from the current range. The U.S. dollar came under heavy selling pressures with the immediate reaction.

Although Fed Chair Jerome Powell said that the Fed hadn’t worked out if they would follow a threshold-based path for cutting rates, he confirmed that the Fed “focused on not making the mistake of keeping rates too high too long.” “We have seen real progress on core inflation. Reason you wouldn’t wait for 2 percent inflation to cut rates is it would be too late,” said Powell.

Following the Fed meeting, traders in the Fed funds futures market were pricing in 150 basis points, or 1.5 percentage points, worth of cuts in the year ahead, according to the CME FedWatch Tool. The Dow Jones Industrial Average soared more than 500 points, to surpass the 37,000 threshold for the first time as investors embraced the Fed’s outlook for rate cuts.

In late New York trading, the euro increased to 1.0886 dollars from 1.0790 dollars in the previous session, and the British pound rose to 1.2621 dollars from 1.2563 dollars in the previous session.

The U.S. dollar bought 143.1550 Japanese yen, lower than 145.6090 Japanese yen of the previous session. The U.S. dollar decreased to 0.8694 Swiss francs from 0.8757 Swiss francs, and it was down to 1.3499 Canadian dollars from 1.3595 Canadian dollars. The U.S. dollar fell to 10.2928 Swedish kronor from 10.4591 Swedish kronor.