Dollar Drops as Fed Holds Rates Steady, Ignores Hike Expectations

The US dollar dropped about 0.7% after the Federal Reserve held interest rates steady and provided no guidance on future hikes.

Despite the Fed's decision, investors still expect a rate hike by October, with futures pricing in almost 0.9 of a hike by that month and more than one full hike by December.

The Canadian dollar lagged behind the dollar's selloff, gaining only about 0.4% as lower oil prices and US-Canada rate spreads tempered its response to the Fed's decision.

US consumers showed resilience, with growth in personal income and spending, but inflation remains a focus for future Fed actions.