US dollar slides after Fed cuts rates, as expected

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By Chibuike Oguh and Gertrude Chavez-Dreyfuss

NEW YORK, Dec 10 (Reuters) - The U.S. dollar fell against major peers including the euro, Swiss franc, and Japanese yen on Wednesday after the Federal Reserve lowered interest rates in a widely expected move, but indicated it will likely pause its easing cycle at the next policy meeting in January.

The Fed's decision to lower the benchmark policy rate by a quarter of a percentage point to the 3.50%-3.75% range drew three dissents: Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeffrey Schmid argued that the policy rate should be left unchanged, while Fed Governor Stephen Miran again advocated for a larger half-percentage-point reduction.

"In considering the extent and timing of additional adjustments to the target range for the federal funds rates, the Committee will carefully assess incoming data," the Federal Open Market Committee said in a statement, a language that in the past has been used to signal a pause in policy actions.

The greenback lost ground against peer currencies immediately after the Fed's announcement. The dollar fell 0.4% against the Swiss franc to 0.8028 franc and was last down 0.2% to 156.635 against the Japanese yen.

The euro last changed hands at $1.1650, up 0.2%, while the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, slid 0.2% to 98.99.

The greenback, however, has since trimmed some of its losses.

"The statement emphasized weakness in the labor market as the principal rationale for the 25-basis-point cut, and this detail is what the market has picked up on, suggesting the Fed could continue easing policy, even though the expectations for easing in 2026 haven't changed with one 25 basis point priced in," said Michael Rosen, chief investment officer at Angeles Investments, in Santa Monica, California. (Reporting by Chibuike Oguh and Gertrude Chavez-Dreyfuss in New York; Additional reporting by Laura Matthews; Editing by Nia Williams and Diane Craft)