* European session sees revival for greenback
* Dollar hit 1-mth low after Fed stops short of hawkish
* Euro buoyed by results of Dutch election
* BOJ, SNB, and BoE stand pat on monetary policy
By Ritvik Carvalho
LONDON, March 16 The dollar sank to a one-month
low, while some surprise hints on the chances of a rise in UK
interest rates drove sterling higher on Thursday as investors
digested the fallout of a second rise in U.S. rates in three
Investors snapped up the greenback at the start of European
trade, judging it looked cheap after sharp falls following the
U.S. Federal Reserve's failure to point aggressively to further
rises in the official premium for holding the currency.
But the dollar struggled to make more progress through the
European morning and waned as New York traders arrived at their
The euro was also buoyed by a Dutch election defeat for
far-right leader Geert Wilders which eased broader fears of a
populist drift in European polls this year.
Yet the mood was still edgy and there was buying of the
market's favourite safe havens for capital. The Swiss franc
gained almost half a percent against the euro while the yen
inched back into positive territory, touching a more than
"The Dutch election result was consistent with the opinion
polling, and obviously the Fed has delivered a rate hike, but in
its most dovish form," said Bank of America G10 currency
strategist Kamal Sharma.
"Ultimately, the near term is going to be dominated by
French election risks. So we still see that the euro is likely
to trade lower heading into those elections."
Dealers said much of the dollar's fall overnight looked to
have been investors taking some profit on the large bets taken
on the currency since November and again in the last fortnight
, in expectation that the Fed would raise rates more
sharply than previously expected going forward.
Investors lodged large bets on the dollar after Donald
Trump's U.S. presidential election win last year, expecting his
mix of tax reform, capital repatriation and new public spending
to raise inflation in the United States and in turn drive Fed
"The Fed did to some extent disappoint yesterday when it
comes to forward guidance... but is obviously remaining on track
with tightening monetary policy," said Manuel Oliveri, currency
strategist at Credit Agricole in London.
"So even if we saw yesterday a reaction lowering the dollar
on the back of unchanged forward guidance, the market still
regards the dollar as a buy on dips as the outlook for the U.S.
is actually ahead of other economies."
The dollar index recovered all its losses since the close of
U.S. trade to stand roughly steady earlier in the day at 100.59.
, but lost momentum and fell to 100.41.
It was also roughly flat on the day at $1.0725 per euro and
The pound hit a two-week high of $1.2373, up 0.6
percent after the Bank of England kept interest rates on hold
but gave a handful of hints in voting results and its minutes
that it might raise them soon.
Outgoing policymaker Kristin Forbes unexpectedly voted to
raise rates and the minutes said that some among the majority
who kept them at a record low felt it would take a slight
further rise in inflation for them to follow suit.
The pound also took back all of its gains against the euro,
to stand more than half a percent higher on the day at 86.80
pence, after the publication of the minutes.
(Reporting by Ritvik Carvalho, editing by Jeremy Gaunt and