The rate hike was the biggest made by the US central bank since 1994, and was delivered after recent data showed little progress in its inflation battle.
Against a basket of currencies, the dollar was 0.50% lower at 104.76, after rising as high as 105.79, its strongest since December 2002, in the immediate aftermath of the Fed decision. The greenback had weakened against the euro earlier in the session on news of a surprise meeting by the European Central Bank, which some traders hoped would address fragmentation risk in the region.
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