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Dollar spikes on Fed rate hike, but slips back as focus turns to ECB

A popular gauge for the U.S. dollar spiked after the Federal Reserve lifted interest rates by 25 basis points on Wednesday but soon slipped back into negative territory as the euphoria failed to stick. The Fed is leading the pack of developed market central banks in terms of monetary policy normalization, and the interest rate differentials created by this dynamic have been a supportive backdrop for the greenback. Its key rate now sits in the range of 1.75% to 2%, following this seventh rate hike since December 2015.