Investing.com - The dollar stabilized against a basket of the other major currencies on Thursday, having slid after the Federal Reserve raised interest rates as expected, but left its interest rate projections for 2018 unchanged.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.47 by 03:40 AM ET (08:40 AM GMT), after falling 0.72% from a one-month high on Wednesday.
The Fed raised interest rates for a third time this year on Wednesday and indicated that it would stay on a similar path next year, disappointing some dollar bulls who had speculated the Fed could raise its interest rate projection for next year to four rate hikes.
The central bank also said it expected inflation to remain below its target for another year, tempering expectations for an accelerated pace of rate hikes.
The dollar was also on the back foot after U.S. core consumer price data released on Wednesday showed slowing inflation.
But hopes for progress on U.S. tax reform, including tax cuts, continued to lend support to the dollar.
The dollar pushed higher against the yen, with USD/JPY rising 0.19% to 112.76 after tumbling 0.9% on Wednesday.
The euro was little changed against the dollar, with EUR/USD at 1.1830, having advanced 0.7% the previous day.
In the euro zone, data on Thursday showed that the German economy grew at the fastest rate in more than six-and-a-half years in December, while a similar survey showed that the French economy also ended 2018 on a strong note.
Sterling edged higher, with GBP/USD rising 0.13% to 1.3432.
The Bank of England and the European Central Bank were to make their final monetary policy announcement of the year later in the day and are expected to hold rates steady.
Meanwhile, the Swiss National Bank left interest rates unchanged at a record low of minus 0.75% after its meeting on Thursday, and pledged to “remain active” in the foreign exchange market to prevent the Swiss franc becoming too strong.
The Swissy remained slightly lower against the euro and the dollar following the announcement, with USD/CHF at 0.9861 and EUR/CHF at 1.1670.