After drifting lower against most of its major counterparts in the Asian and European session, the U.S. dollar gained some strength Wednesday afternoon after the Fed hiked interest rates and signaled a series of hikes this year.
However, the greenback, which rose to 99.08, failed to sustain at higher levels and dropped to 98.32, falling nearly 0.8% from the previous close.
The Fed bank announced its widely expected decision to raise interest rates for the first time since December of 2018. The central bank said it has decided to raise the target range for the federal funds rate by 25 basis points to 0.25 to 0.5%.
The central bank also predicted ongoing rate hikes will be appropriate, with the Fed’s latest projections pointing to an interest rate of 1.9% by the end of the year.
Additionally, the Fed said it expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting.
In other economic news, data from the Commerce Department showed retail sales in the U.S. rose by 0.3% in February after soaring by an upwardly revised 4.9% in January. Economists had expected retail sales to increase by 0.4% compared to the 3.8% spike originally reported for the previous month.
A report from the Labor Department showed import prices jumped by 1.4% in February after surging by a downwardly revised 1.9% in January. Economists had expected import prices to shoot up by 1.5% compared to the 2% spike originally reported for the previous month.
Against the Euro, the dollar firmed marginally to $1.0949 before turning weak again. It is currently hovering around $1.1040, down sharply from the previous close of $1.0957.
The dollar is trading at $1.3145 against Pound Sterling, weakening from $1.3041.
The dollar fetching 118.64 yen a unit, about 0.3% more than the previous close of 118.30 yen.
Against the Aussie, the dollar is trading at 0.7288, down sharply from 0.7196 Tuesday evening.
The Swiss franc is at 0.9404 a dollar, up marginally from 0.9414. The loonie has firmed to 1.2692 against the dollar, after having dropped to 1.2777 a few minutes after the Fed announced its rate decision.