U.S. dollar rallies after Fed decision

The U.S. dollar rallied against other major peers on Thursday after Federal Reserve decided to raise interest rates for the first time this year.

In view of realized and expected labor market conditions and inflation, the Federal Open Market Committee decided to raise the target range for the federal funds rate to 0.50 percent to 0.75 percent, said the Fed in a statement after concluding a two-day policy meeting on Thursday.

The Fed also released its updated economic projections, which indicated that the central bank forecasts three rate hikes next year, while in its September projections, Fed officials expected only two rate hikes in 2017.

The dollar index, which measures the greenback against six major peers, touched 14-year high of 103.320 during the session on rising expectations for more rate-hikes next year. The index was up 1.28 percent at 103.060 in late trading.

On the economic front, the Consumer Price Index for all urban consumers increased 0.2 percent in November on a seasonally adjusted basis, on par with market consensus, the U.S. Labor Department said Thursday.

In the week ending Dec.10, the advance figure for seasonally adjusted initial jobless claims was 254,000, a decrease of 4,000 from the previous week's unrevised level of 258,000, said the Labor Department in another report.

In late New York trading, the euro fell to 1.0415 dollars from 1.0578 dollars in the previous session, and the British pound dropped to 1.2423 dollars from 1.2616 U.S. dollars in the previous session. The Australian dollar inched down to 0.7354 dollar from 0.7451 dollar.

The U.S. dollar bought 118.13 Japanese yen, higher than 116.20 yen of the previous session. The U.S. dollar rose to 1.0313 Swiss franc from 1.0172 Swiss franc, and it climbed to 1.3358 Canadian dollars from 1.3239 Canadian dollars. Endit