U.S. Dollar Gives Back Ground After Yesterday's Surge

(RTTNews) - After surging during Wednesday's trading, the value of the U.S. dollar has shown a notable move back to the downside during trading on Thursday.

The U.S. dollar index is currently sliding 0.73 points or 0.7 percent to 104.35 after jumping by 1.6 percent to its highest levels in almost four months on Wednesday.

The greenback is trading at 152.91 yen versus the 154.63 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.0802 compared to yesterday's $1.0729.

Traders may have looked to cash in on yesterday's rally, which came on the heels of former President Donald Trump's decisive victory in the presidential election.

The pullback also came as the Federal Reserve announced its widely expected decision to lower interest rates by a quarter point.

After aggressively slashing interest rates by half a percentage point in September, the Fed said it has decided to lower the target range for the federal funds rate by 25 basis points to 4.50 to 4.75 percent.

The central bank said its decision to continue lowering rates comes as labor market conditions have generally eased, while inflation continues to make progress towards its 2 percent objective.

However, the Fed said the risks to achieving its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run are roughly in balance.

"The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate," the Fed said.

In considering future adjustments to rates, the central bank said it will continue to carefully assess incoming data, the evolving outlook, and the balance of risks.

Fed Chair Jerome Powell stressed during his post-meeting press conference that rates are not on "any preset course" and said the central bank will make future decisions "meeting by meeting."

Powell also said the Fed is "well positioned" to deal with the risks to both sides of its dual mandate, noting the it can cut rates more slowly or more quickly depending on the economic developments.