* Fed cuts rates, but signals a pause
* U.S. economy slowed less than expected in Q3
(Adds quote, updates prices)
By Karen Brettell
NEW YORK, Oct 30 (Reuters) - The dollar fell against a
basket of major currencies on Wednesday, reversing initial
gains, after the Federal Reserve cut interest rates for the
third time this year but signaled its rate-cut cycle might be at
a pause, as was broadly expected.
In lowering its policy rate by a quarter of a percentage
point to a target range of between 1.50% and 1.75%, the U.S.
central bank dropped a previous reference in its policy
statement that it "will act as appropriate" to sustain the
economic expansion - language that was considered a sign for
future rate cuts. “That suggests that it's going to take a little bit more
weakness from here on out for the Fed to lower rates, and really
it's going to take quite a sustained turn for the worse in terms
of trade discussions,” said Bipan Rai, North American head of fx
strategy at CIBC Capital Markets in Toronto.
Comments by Fed Chairman Jerome Powell in the press
conference following the U.S. central bank's statement further
boosted the notion that additional cuts in the near-term are
unlikely.
The current stance of monetary policy is likely to remain
appropriate and it would take a material reassessment in the
outlook for the Fed to change its current stance, Powell said.
The dollar index .DXY rose to 98.00 as Powell spoke, the
highest since Oct. 17, before retracing back to 97.53, down
0.16% on the day.
Broad expectations heading into the meeting that the Fed
would adopt a more hawkish tone was seen as limiting dollar
strength.
"By and large the market was positioned for a less dovish or
a hawkish cut today, but there aren't any conclusive signals
that the Fed is done just yet," Rai said.
The dollar had briefly gained earlier on Wednesday after
data showed that the U.S. economy slowed less than expected in
the third quarter. The data “pointed to below trend growth, but still
relatively steady and pretty solid growth in the context of
what's going on in the rest of the world,” said Erik Nelson, a
currency strategist at Wells Fargo in New York.
Payrolls data for October released on Friday is the next
major U.S. economic focus.
The greenback also temporarily dipped on reports that Chile
has withdrawn as host of an APEC trade summit in November where
the United States and China had been expected to take major
steps toward ending a 15-month-old trade war. Optimism that the U.S. and China will reach a deal has
boosted risk sentiment this week.
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Currency bid prices at 3:08PM (1908 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar EUR= $1.1135 $1.1110 +0.23% -2.91% +1.1138 +1.1081
Dollar/Yen JPY= 108.8100 108.8700 -0.06% -1.32% +109.2800 +108.8000
Euro/Yen EURJPY= 121.20 120.98 +0.18% -3.98% +121.2700 +120.8800
Dollar/Swiss CHF= 0.9898 0.9937 -0.39% +0.86% +0.9945 +0.9899
Sterling/Dollar GBP= 1.2892 1.2865 +0.21% +1.06% +1.2905 +1.2846
Dollar/Canadian CAD= 1.3174 1.3085 +0.68% -3.40% +1.3207 +1.3073
Australian/Doll AUD= 0.6887 0.6864 +0.34% -2.31% +0.6887 +0.6849
Euro/Swiss EURCHF= 1.1024 1.1045 -0.19% -2.04% +1.1049 +1.1015
Euro/Sterling EURGBP= 0.8634 0.8634 +0.00% -3.90% +0.8644 +0.8612
NZ NZD= 0.6367 0.6354 +0.20% -5.21% +0.6368 +0.6335
Dollar/Dollar
Dollar/Norway NOK= 9.1996 9.2256 -0.28% +6.49% +9.2588 +9.1980
Euro/Norway EURNOK= 10.2446 10.2536 -0.09% +3.42% +10.2784 +10.2320
Dollar/Sweden SEK= 9.6745 9.7005 -0.06% +7.93% +9.7421 +9.6729
Euro/Sweden EURSEK= 10.7722 10.7790 -0.06% +4.95% +10.8210 +10.7705
(Editing by David Gregorio and Marguerita Choy)