Fed's gloomy outlook steadies dollar slide, for now

RATE DOLLAR - SINGAPORE. The dollar steadied against riskier currencies and the safe-haven yen hit a one-month high on Thursday, as the U.S. Federal Reserve's dour economic outlook spooked investors.

The moves arrested the greenback's initial slide after the Fed's policy stance, projecting rates near zero for years, was even more accommodative than expected.

The Australian dollar retreated from an overnight 11-month high and fell as much as half a percent to US$ 0.6966. The New Zealand dollar gave up a four-and-a-half month high and fell 0.3% to US$ 0.6516.

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The yen rose marginally to 106.90, its highest since mid May. Though the euro - which hit a three month peak overnight - held firm, pointing to the possibility of more downside to come for the dollar once the dust settles.

The single currency last bought US$ 1.1382.

Fed policymakers projected the U.S. economy to shrink 6.5% this year and the unemployment rate to be 9.3% at year's end. "It is a long road," Fed Chair Jerome Powell said via video link on Wednesday.

"We can use our tools to support the labour market and the economy, and we can use them until we fully recover," he said.