The dollar rebounded from its biggest drop in six years amid speculation the Federal Reserve will still raise borrowing costs this year even after cutting its interest-rate projections.

The greenback strengthened against 13 of its 16 major peers after the Fed moved a step closer to higher rates against a backdrop of global easing, led by the European Central Bank and Bank of Japan. Fed Chair Janet Yellen wouldn’t rule out a rate increase as early as June after the central bank removed its commitment to patience on tighter monetary policy Wednesday.

The Bloomberg Dollar Spot Index, a gauge of the currency’s performance against 10 major peers, climbed 1.4 percent to 1,211.18 as of 3:05 p.m. New York time, halting a three-day drop. The gauge reached 1,222.12 on March 13, the highest level based on closing prices going back to 2004.

The U.S. currency strengthened 2 percent to $1.0644 per euro, its first advance in four days. The dollar gained 0.7 percent to 120.94 yen.

Bloomberg’s dollar gauge slumped 1.8 percent on Wednesday, the most since the Fed announced Treasury bond purchases in March 2009, as the U.S. central bank almost halved its expectations for year-end rates. The federal funds rate will be 0.625 percent by the end of 2015, according to Fed members’ estimates, versus a December forecast of 1.125 percent.

Source : Bloomberg