Dollar falters

The dollar was on the back foot on Thursday, even as the Federal Reserve kept to its hawkish rhetoric after raising rates by half a percentage point, as investors were doubtful over how much the central bank would commit to putting the brakes on growth to curb inflation.

Fed Chair Jerome Powell said overnight that the Fed will deliver more interest rate increases next year despite a possible recession in the U.S., with rates expected to peak above 5 per cent.

That did little to sustain an initial rally to the greenback.

Against the dollar, the pound and the euro hovered near their six-month highs in early Asia trade on Thursday, after having touched those levels in the previous session.

Sterling was last 0.1 per cent lower at $1.2415, following a 0.5 per cent overnight gain, while the euro slipped 0.09 per cent to $1.0673, having also risen 0.5 per cent overnight.