Dollar Fails To Hold Gains, Turns Mixed Against Major Counterparts

(RTTNews) - The U.S. dollar gained against its major counterparts on Wednesday after the Federal Reserve decided to keep interest rates unchanged, and the central bank's accompanying statement suggested additional rate hikes in an effort to return inflation to its 2% objective.

However, the currency shed gains and even turned weak against some of its rivals later on in the session as traders seem optimistic the recent cycle of rate increase is over.

"The Fed tried to deliver a hawkish hold but Wall Street is not believing additional tightening will happen this cycle," said Edward Moya, Senior Market Analyst at OANDA.

In economic releases, payroll processor ADP said private sector employment in the U.S. increased by less than expected in the month of October.

The report said private sector employment climbed by 113,000 jobs in October after rising by 89,000 jobs in September. Economists had expected employment to jump by 150,000 jobs.

A separate report released by the Institute for Supply Management showed manufacturing activity in the U.S. unexpectedly contracted at a faster rate in the month of October.

The ISM said its manufacturing PMI fell to 46.7 in October from 49.0 in September, with a reading below 50 indicating a contraction. Economists had expected the index to come in unchanged compared to the previous month.

The dollar index, which rose to 107.11, pared gains in the last one hour, and was at 106.68, up just marginally from the previous close. Against the Euro, the dollar firmed to around 1.0525 before paring gains. It is currently at 1.0572, up marginally from Tuesday's close. The dollar is up slightly against Pound Sterling at 1.2150, after having firmed to 1.2095 earlier in the session.

Against the Japanese currency, the dollar is weak at 150.89 yen. The dollar is up against the Aussie at 0.6391, and against Swiss franc, it is trading lower at CHF 0.9078. The Loonie is up marginally at 1.3862 a dollar.