Dollar Rebounds After Mild Setback Post Fed Rate Decision

(RTTNews) - The U.S. dollar slipped after the Federal Reserve announced its monetary policy on Wednesday, but regained lost ground and emerged above the flat line subsequently.

The Fed raised interest rates by another 75 basis points as widely expected, citing efforts to achieve maximum employment and inflation at the rate of 2% over the long run.

The central bank also said that ongoing increases in rates will be "appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time."

However, the central bank noted that future rate hikes will "take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments."

"In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook," the Fed reiterated.

The central bank added, "The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals."

A report released by payroll processor ADP showed private sector employment in the U.S. increased by more than expected in the month of October.

ADP said private sector employment jumped by 239,000 jobs in October after climbing by a downwardly revised 192,000 jobs in September.

Economists had expected private sector employment to advance by 195,000 jobs compared to the addition of 208,000 jobs originally reported for the previous month.

The Bank of England's interest rate decision is due on Thursday. The BoE is widely expected to raise its benchmark rate by 75 basis points.

The dollar index, which dropped to 110.43 after the central bank's rate decision, climbed to 112.05 as the session progressed, gaining more than 0.5% over the previous close.

Against the Euro, the dollar has firmed to 0.9826 after dropping to 0.9977.

The dollar is up against Pound Sterling at $1.1390, gaining from $1.1565.

Against the Japanese currency, the dollar is weak, fetching 147.83 yen a unit compared with 148.24 yen on Tuesday.

The dollar is up against the Aussie at 0.6356, and stronger by about 0.3% against the Swiss currency at CHF 1.0031.

The Loonie has weakened to 1.3706 a dollar, after having firmed to 1.3549 immediately after the Fed announced its rate decision.