By Chibuike Oguh
NEW YORK (Reuters) -The U.S. dollar advanced against its peers on Wednesday after the Federal Reserve delivered a widely expected interest rate cut while also indicating it would slow the pace of its monetary policy easing cycle.
The Fed lowered its benchmark policy rate by 25 basis points to the 4.25% to 4.50% range, with officials signaling that they would likely pause future rate cuts next year given a stable labor market and inflation. The yield on benchmark U.S. 10-year notes rose 6.1 basis points to 4.446%, hitting a four-week high.
“The Fed increased its core inflation forecast and adjusted dot plot; so rate cuts are being priced out and I think we have one more rate cut priced in for next year and that’s less than it was before,” said Axel Merk, president and chief investment officer at Merk Hard Currency Fund, Palo Alto, California.
“So the initial take by the market is it’s hawkish and that it’s dollar positive.”
The dollar strengthened 0.72% to 0.89895 against the Swiss franc in choppy trading. The euro was down 0.88% at $1.0397.
The U.S. dollar index, which measures the greenback against six rivals, was up 0.83% at 107.82, rising to a near four-week high.
This post is originally published on INVESTING.
