US dollar extends gains against Turkish Lira after Fed decision

The U.S. dollar rose sharply against the Turkish Lira late on Sept. 20 after the Federal Reserve unveiled plans to wind down its crisis-era stimulus and hinted at another interest rate hike before the end of the year.

The U.S. dollar-Turkish Lira index hit 3.52 following the Fed's decision, while it closed the day at 3.47. 
The index rebounded to 3.51 early on Sept. 21. 

Markets will have an eye on the latest developments regarding the planned Iraqi Kurdish referendum, which has put pressure on the lira. 

After concluding a closely watched two-day policy meeting on Sept. 20, the Fed left interest rates unchanged as expected, but signaled it still expects one more increase by the end of the year despite a recent bout of low inflation.

As anticipated, the U.S. central bank also said it would begin in October to reduce its balance sheet of around $4.2 trillion in U.S. Treasury bonds and mortgage-backed securities it acquired after the 2008 financial crisis.

The greenback extended overnight gains versus yen and euro after the Fed announcement.

New economic projections released after the Fed's two-day policy meeting showed 11 of 16 officials see the "appropriate" level for the federal funds rate, the central bank's benchmark interest rate, to be in a range between 1.25 percent and 1.50 percent by the end of 2017, or 0.25 percentage points above the current level.

U.S. bond yields rose, pushing up the U.S. dollar after the Fed's decision, but U.S. benchmark stock indexes were little changed.

U.S. benchmark 10-year Treasury note yields rose as far as 2.29 percent, the highest since Aug. 8., a move which helped push bank stock prices higher also.

"The Fed took another step on its path of...