1st LD Writethru: U.S. dollar drops on Fed announcement

The U.S. dollar slumped against other major currencies on Wednesday as the Federal Reserve remained cautious in raising interest rates in its policy statement.

The central bank removed the pledge to remain "patient" about a rate hike in the statement released after its two-day policy meeting on Wednesday. But Fed Chair Janet Yellen stressed in the following news conference that "just because we removed the word patient from the statement doesn't mean we're going to be impatient."

The Fed also noted that the U.S. economic growth had "moderated somewhat" since January and it lowered down the growth forecast by 0.3 percentage points to 2.3-2.7 percent this year.

The central bank said it will "be appropriate" to raise the interest rates when it has seen "further improvement" in the labor market and is "reasonably confident" that inflation will move back to its 2 percent objective over the medium term. "The Committee judges that an increase in the target range for the federal funds rate remains unlikely at the April meeting," it said.

Analysts said the greenback was under pressure as the announcement signaled that the widely expected June rate hike was almost off the table. The dollar index, which measures the greenback against six major peers, was down 1.55 percent at 98.042 in late trading.

In late New York trading, the euro rose to 1.0744 dollars from 1.0600 dollars in the previous session, and the British pound rose to 1.4863 dollars from 1.4754 dollars. The Australian dollar increased to 0.7724 dollars from 0.7626 dollars.

The U.S. dollar bought 120.69 Japanese yen, lower than 121.39 yen of the previous session. The U.S. dollar edged down to 0.9887 Swiss francs from 1.0066 Swiss francs, and it declined to 1.2671 Canadian dollars from 1.2775 Canadian dollars. Endite