U.S. dollar falls after Fed rate hike decision

New York, US | Xinhua |  The U.S. dollar fell on Wednesday, after the Federal Reserve delivered a widely-expected interest rate hike.

The dollar index, which measures the greenback against six major peers, fell 0.49 percent to 100.9027 in late trading.

The Federal Open Market Committee (FOMC) decided to raise the benchmark rate by 25 basis points on Wednesday, as widely anticipated, to target a range of 5.25 percent to 5.5 percent, reaching the highest level in 22 years.

The U.S. inflation remains well above the central bank’s target of two percent, Fed Chair Jerome Powell said on Wednesday, adding that it will take time to bring price increases back down. “The process of getting inflation back down to two percent has a long way to go.”

The Fed said it “will continue to assess additional information and its implications for monetary policy,” suggesting the next FOMC meeting could be either another hike, or it could pause or skip again. Many analysts predicted the Fed is likely done for this cycle.

“The attention is now falling on whether or not the FOMC will deliver the additional 25bp hike this year,” said Michael Brown, Market Analyst at Trader X.

The U.S. two-year Treasury yields were steady at around 4.9 percent and 10-year yields at close to 3.9 percent, similar to the levels held before the statement.

In late New York trading, the euro increased to 1.1105 U.S. dollars from 1.1045 dollars in the previous session, and the British pound was up to 1.2957 U.S. dollars from 1.2892 dollars.

The U.S. dollar bought 139.9900 Japanese yen, lower than 141.0230 Japanese yen of the previous session. The U.S. dollar was down to 0.8605 Swiss francs from 0.8646 Swiss francs, and it was up to 1.3198 Canadian dollars from 1.3167 Canadian dollars. The U.S. dollar rose to 10.3921 Swedish Krona from 10.3802 Swedish Krona. ■