New York, Dec 20 (IANS): The US dollar dipped as the Federal Reserve raised interest rates by a quarter point, paring some of the sharp losses of the greenback in the previous sessions.

Following the Fed's decision to raise its benchmark overnight lending rate, the greenback extended gains but still settled at a weaker level against a basket of other major currencies.

In late New York trading on Wednesday, the euro rose to $1.1371 from $1.1355 in the previous session, and the British pound fell to $1.2622 from $1.2638 in the previous session, Xinhua news agency reported.

The Australian dollar was down to $0.7114 from $0.7171.

The US dollar bought 112.35 Japanese yen, lower than 112.53 Japanese yen of the previous session. The US dollar was up to 0.9942 Swiss franc from 0.9928 Swiss franc, and it increased to 1.3494 Canadian dollars from 1.3492 Canadian dollars.

The US central bank raised the federal funds rate target to a range of 2.25 per cent to 2.5 per cent, higher than the 2-2.25 per cent range stated in November.

The move incurred a dramatic sell-off in stocks and a fall in yields of long-dated US Treasury bonds, due to grave concerns over a potential slowdown in economic growth.

Yet such worries were eased to some extent, as the Fed reduced the forecast numbers of rate hikes in 2019 to two from three stated in September, and projected only one hike in 2020, signaling a slower pace of its monetary tightening.

In its policy statement, the Federal Open Market Committee judged that risks to economic outlook "are roughly balanced," but stressed they "will continue to monitor global economic and financial developments and assess their implications for the economic outlook."