*
Fed outcome less hawkish than expected
*
Dollar soft; euro, sterling hit new highs
*
Fed to start buying Treasury bills to manage market
liquidity
*
Souring risk mood sends Aussie, cryptos sliding
*
SNB leaves rates steady, franc strong
(Adds new comment, FX table, byline, NEW YORK dateline, updates
prices)
By Rae Wee, Alun John and Gertrude Chavez-Dreyfuss
SINGAPORE/LONDON/NEW YORK, Dec 11 (Reuters) - The U.S
dollar slumped on Thursday, hitting multi-month lows against the
euro, Swiss franc, and sterling and extending losses from the
previous session after the Federal Reserve delivered a less
hawkish outlook than some had expected.
The Swiss franc drew support from the Swiss National
Bank's decision to hold interest rates steady. The dollar fell
0.7% versus the franc to 0.7946, after earlier touching
its lowest since mid-November.
The greenback briefly found support earlier in the
session as Asian shares and U.S. futures slid after
disappointing earnings from U.S. cloud computing giant Oracle
reignited fears that surging AI infrastructure costs
could outpace profitability.
However, that support faded in the U.S. session.
The euro was last up 0.4% at $1.1737 after
earlier hitting its highest since October 3.
Sterling rose 0.3% to $1.3420 after earlier
touching its highest level in roughly two months.
The dollar also weakened against the yen, shedding 0.6% to
156.04 yen.
The Fed lowered rates on Wednesday by 25 basis points, but,
as the move was widely expected, the reaction reflected much
more the broader messaging, projections and the voting split.
"There were only two hawkish dissenters that opposed a cut,
which is not quite as many as investors had braced for," wrote
Matthew Ryan, head of market strategy at global financial
services firm Ebury, in emailed comments.
"(Fed Chair Jerome) Powell hinted that the Fed would sit
on its hands in January, although he far from gave the
impression that a long pause in the cycle was on the way, as he
expressed a willingness for further cuts in order to support the
labor market."
Heading into the Fed meeting, traders had been wondering
whether they would get a similar message to those sent by the
Australian central bank chief and an influential European
Central Bank policymaker suggesting their next moves would be
rate hikes.
Also weighing on the dollar, U.S. Treasuries attracted bids
and pushed yields lower after the Fed announced it would start
buying short-dated government bonds from December 12 to help
manage market liquidity levels, with an initial round totalling
some $40 billion in Treasury bills.
That's on top of the $15 billion that the Fed will reinvest
in T-bills starting this month from its maturing mortgage-backed
securities (MBS).
The combined $55 billion in liquidity injection from the
Fed is a positive for market sentiment and risky assets but
negative for safe-haven assets such as the dollar.
SWISSIE STRONG, AUSSIE AND CRYPTO HIT
Away from the dollar, the Swiss franc strengthened after the
Swiss National Bank left its policy rate unchanged at 0% and
said a recent agreement to reduce U.S. tariffs on Swiss goods
had improved the economic outlook, even as inflation has
somewhat undershot expectations.
The euro fell 0.3% against the Swiss franc to 0.9331
.
While the strength of the franc is causing problems for the
SNB by weighing heavily on inflation, the SNB's chairman Martin
Schlegel reiterated that the hurdle for negative rates is high.
Elsewhere, the Australian dollar was hurt by data showing
employment in November fell by the most in nine months. The
Aussie dollar slipped 0.1% to US$0.6666.
Bitcoin, often viewed as a barometer of risk
appetite, was hurt by the tech selloff and briefly slid back
below the $90,000 level. It was last hovering slightly above
that point, down 2.1% at $90,446. Ether was down more
than 4% at $3,203.
"Even with a softer Fed outlook, the market is still working
through the excess leverage from October, so reactions to macro
signals are slower than usual," Gracie Lin, OKX's Singapore CEO,
said of the fall in crypto prices.
"The 25-basis-point cut was already priced in... and the
wider macro and geopolitical backdrop is still uncertain. All of
that keeps the immediate response muted."
Currency
bid
prices
at 11
December
? 03:28
p.m. GMT
Descript RIC Last U.S. Pct YTD High Low
ion Close Chang Pct Bid Bid
Previous e
Session
Dollar % 21
Euro/Dol 3
Dollar/Y % .95
5
Euro/Yen Dollar/S Sterling 9 335
5?
Dollar/C 764
Aussie/D % 3 662
7
Euro/Swi Euro/Ste NZ 1 788
ollar
Dollar/N ? % 5 074
8
Euro/Nor Dollar/S % % 278
Euro/Swe 5
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