Dollar falls after Fed statement

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NEW YORK (CNNMoney.com) -- The dollar fell Wednesday as a rally on Wall Street undermined demand for the greenback as a safe haven.

The retreat extended after the Federal Reserve said it will hold its benchmark interest rate at historic lows near 0%, although "economic activity has continued to pick up."

"The dominant driver is the fact that equity markets are higher," said Nick Bennenbroek, head of currency strategy at Wells Fargo in New York.

The dollar often falls when stocks rise, as investors seek higher returns in more risky markets and higher yielding currencies such as the euro.

The dollar was down 0.9% against the euro to $1.4863. It slid 0.8% versus the U.K. pound to $1.6580. Against the Japanese yen, however, the dollar rose 0.9% to ¥91.11.

The dollar index, which measures the greenback's value against a basket of currencies, slid to 75.88 from 76.33 late Tuesday.

Stocks rallied as investors took their cues from the commodities markets and economic news that was largely in line with expectations.

As the dollar slumped, the price of gold rose to an all-time high, while oil pushed near its highest level of the year.

A weaker greenback makes dollar-denominated commodities such as gold and crude oil cheaper for buyers in other currencies.