The euro dropped by one percent to $1.0406 on Thursday. This is the lowest level against the dollar since early 2003.
Federal Reserve officials raised interest rates for the first time this year and forecast a steeper path for borrowing costs in 2017. According to the Federal Reserve officials, inflation expectations have increased “considerably” and the labor market is tightening.
Consumer spending is “rising moderately”, job gains have been solid and business investment “has remained soft,” the Fed said. New projections show central bankers expect three quarter-point rate increases in 2017, up from the two seen in the previous forecasts in September.