US Fed drops rates timing, dollar slides

Markets remain subdued on Thursday, after the US Federal Open Market Committee dropped any references to the timing for a potential interest rate rise.

Expectations for a June hike have waned, and the delayed rate increase has sent the greenback spiralling to a two-month low.

The dollar index slipped to its lowest level since February. The euro and Japanese yen also rallied, which boosted demand for oil from holders of other currencies.

Brent crude oil appreciated around a quarter of a dollar in trading this morning, while US crude oil rose to a five-month high.

Elsewhere, focus remains on the eurozone and the Greek debt crisis. Ratings agency Moody’s said the lack of progress in negotiations means risk of a Grexit is rising, although it still expects Greece to reach an agreement with its creditors.

However, some upbeat news surfaced as inflation in the European Union rose to zero in April. It brought an end to a four-month run of deflation, but analysts warned that price pressures remain weak.