U.S. Dollar Rises Off Session Low After Fed Move, But Remains Down On The Day

The U.S. dollar weakened against its major rivals on Wednesday, though it was off its lows of the session after the U.S. Federal Reserve raised interest rates, as had been widely expected. The U.S. dollar index , which measures the buck against a half-dozen rivals, lost 0.5% to 96.52; earlier, it fell as much as 0.7%. The U.S. central bank lifted its benchmark interest rate to between 1% and 1.25%, stuck to plans for one more rate hike in 2017 and said that starting "this year" it would gradually shrink its massive $4.5 trillion balance sheet. The dollar has traded lower for much of Wednesday's session, following the release of data that came in below forecasts. The consumer-price index, released ahead of the Fed policy update, fell by a seasonally adjusted 0.1% in May while the rate of inflation over the past 12 months slowed to 1.9% in May from a five-year high of 2.7% just four months ago. Separately, May retail sales fell 0.3%, their biggest drop in 16 months. In specific pairs, the euro rose 0.6% against the dollar, while the buck sank 0.8% against the yen , having previously dropped as much as 1.1%.