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Dollar Surges Higher After Fed Rate Decision, Comments

The U.S. dollar surged higher and gained against most major currencies on Wednesday after the Federal Reserve stopped short of hinting at future easing even as it cut interest rates by 25 basis points at the conclusion of their two-day monetary policy meeting.

The dollar index rose to 98.69 after the Fed announcement and was last seen at 98.60, up 0.35% from previous close.

Against the Euro, the dollar strengthened to 1.1015 but subsequently pared some gains as it eased to 1.1029, still up by a solid 0.4%.

Against pound sterling, the dollar rose to 1.2465, gaining nearly 0.3%.

The Japanese yen weakened to 108.46 a dollar, losing 0.32%.

The dollar gained nearly 0.4% against the loonie, at 1.3294. Against Swiss franc, the dollar was up 0.45% at 0.9976, while against Aussie, it was up 0.55%, with the Aussie-Dollar pair quoting at 0.6828.

The Federal Reserve today cut rates by 25 basis points as widely expected, lowering the target range for the federal funds rate to 1-3/4 to 2%.

The central bank attributed the cut to the implications of global developments for the economic outlook as well as muted inflation pressures.

The much anticipated accompanying statement was largely unchanged from July, with the Fed reiterating that the labor market remains strong and that economic activity has been rising at a moderate rate.

The central bank reiterated that it will act as appropriate to sustain the economic expansion, with a strong labor market and inflation near its symmetric 2% objective.

Shortly after the announcement, U.S. President Donald Trump tweeted, "Jay Powell and the Federal Reserve Fail Again. No 'guts,' no sense, no vision! A terrible communicator!"

Data released by the Labor Department Wednesday morning showed new residential construction in the U.S. showed a substantial rebound in the month of August. The report said housing starts soared by 12.3% to an annual rate of 1.364 million in August after slumping by 1.5% to a revised rate of 1.215 million in July.

Economists had expected housing starts to surge up by 5% to a rate of 1.250 million from the 1.191 million originally reported for the previous month.

The Commerce Department said building permits also spiked by 7.7% to an annual rate of 1.419 million in August after jumping by 6.9% to a revised rate of 1.317 million in July.

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