Dollar Dips as Fed Eases Rates: Market Reactions Mixed

The U.S. dollar declined against major currencies following a Federal Reserve decision to lower interest rates by a quarter percentage point. The move, which prompted mixed reactions within the Fed, signals a possible pause in future rate changes. The greenback's fall was reflected in various currency exchanges.

The U.S. dollar experienced a dip against major global currencies such as the euro, Swiss franc, and Japanese yen on Wednesday. This followed the Federal Reserve's anticipated decision to lower interest rates by a quarter of a percentage point, setting a new benchmark range of 3.50%-3.75%.

The Fed's move, however, sparked dissent among its ranks, with Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid arguing against any change in the policy rate, while Fed Governor Stephen Miran sought a more substantial reduction. The Committee's statement pointed to labor market weaknesses as the rationale for easing and suggested a pause in future policy adjustments.

Immediately after the announcement, the dollar fell 0.4% against the Swiss franc and 0.2% against the Japanese yen. Similarly, the euro rose 0.2% against the dollar, and the dollar index decreased by 0.2% to 98.99. Michael Rosen of Angeles Investments highlighted that markets noted the focus on labor market conditions, suggesting potential future policy easing.

(With inputs from agencies.)