FOREX-Dollar edges lower after Fed holds rates steady

* Fed sees moderate economic growth next year
* Traders await ECB meetings, trade deadline
* HK dlr hits highest since July as carry trades unwind
* Sterling rises after latest UK election poll
* Swedish crown surges on inflation surprise

(Updates with afternoon trading, Fed decision)
By Saqib Iqbal Ahmed
NEW YORK, Dec 11 (Reuters) - The U.S. dollar edged lower
against a basket of major currencies on Wednesday after the U.S.
Federal Reserve held interest rates steady and signaled
borrowing costs are likely to remain unchanged indefinitely.
The Fed expects moderate economic growth and low
unemployment to continue through next year's presidential
election, the U.S. central bank's rate-setting committee said in
its policy statement after the end of a two-day meeting on
Wednesday. The decision left the benchmark overnight lending rate in
its current target range between 1.50% and 1.75%.
"The bar to a rate hike remains higher than the bar to
lowering rates further, but overall you are looking at a Fed
that is fairly confident about where the economy is headed and
expects inflation to remain under pressure for a prolonged
period of time," said Karl Schamotta, chief market strategist at
Cambridge Global Payments in Toronto.
The dollar index .DXY , which measures the greenback
against six other major currencies, was 0.2% lower at 97.218.
"Market participants are going to keep an eye out for the
European Central Bank meeting tomorrow, but mostly will remain
focused on what happens on Saturday with respect to U.S.-China
trade negotiations," Schamotta said.
U.S. President Donald Trump has set Dec. 15 as the date to
impose tariffs on nearly $160 billion in Chinese consumer goods,
falling just days before Christmas in a move that could be
unwelcome in both the United States and China. But it remains
unclear if he Trump administration will go ahead with the
tariffs. "If we do see a delay in tariffs, that clears the way for
other currencies to rise relative to the dollar," Schamotta
said.
The euro was 0.23% higher ahead of new ECB boss Christine
Lagarde's first policy meeting on Thursday, where investors will
scrutinize her every word for a sense of the direction the bank
will take under her leadership. Elsewhere, Sweden's crown jumped to a more than four-month
high against the dollar after strong inflation data made it
highly likely the country would end negative interest rates. The
dollar was 0.98% lower against the Swedish crown. In another notable move, the Hong Kong dollar rallied to its
strongest level since July 24, which analysts attributed to the
unwinding of bets previously profiting from "carry trades" -
borrowing with low interest rates in Hong Kong to purchase U.S.
dollar assets. The greenback was 0.22% lower against the Hong Kong dollar.
HKD= . Hong Kong's currency is pegged to the greenback at a
tight range of 7.75-7.85 per dollar and the city's monetary
policy moves lock-step with the United States.
The pound was 0.3% higher in very thin trading a day ahead
of Britain's general election, shrugging off a key opinion poll
that showed the ruling Conservative Party might still fail to
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Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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