Dollar Dips as Fed Cuts Interest Rates: Market Reactions Unfold

The U.S. dollar weakened against key currencies such as the euro, Swiss franc, and Japanese yen following the Federal Reserve's decision to lower interest rates by 0.25%. The move saw dissent from three Federal Reserve officials. The dollar index, reflecting its value against a currency basket, also fell.

The U.S. dollar continued its decline against major currencies like the euro, Swiss franc, and Japanese yen after the Federal Reserve announced an interest rate cut this Wednesday. The central bank's decision to reduce the benchmark rate by a quarter-point to a range of 3.50%-3.75% was widely anticipated.

Notably, the interest rate decision drew three dissenting voices within the Fed. Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid argued against the cut, preferring to maintain the current rate. Fed Governor Stephen Miran, however, pushed for an even more significant reduction.

The market reacted swiftly, with the greenback losing value against its peers. The dollar weakened 0.58% against the Swiss franc and 0.4% against the Japanese yen, while the euro climbed 0.39% against the dollar. The dollar index, which tracks the U.S. currency against a basket of others including the yen and the euro, decreased by 0.38% to 98.84.

(With inputs from agencies.)