The U.S. dollar advanced against its major counterparts in the New York session on Wednesday, as the Federal Reserve cut interest rates by a quarter point but indicated fewer rate cuts than previously projected next year.

The Fed lowered the target range for the federal funds rate by 25 basis points to 4.25 to 4.50 percent, matching the rate cut seen in early November.

The central bank also described the economic outlook as "uncertain" and said the risks to both sides of its dual mandate are "roughly in balance."

With the rate cut almost universally expected, the focus of the announcement was on Fed officials' latest economic projections, which indicate fewer than previously forecast rate cuts next year.

The latest projections suggest rates will be in a range of 3.75 to 4.0 percent by the end of 2025 compared to the range of 3.25 to 3.50 percent forecast in September.

Assuming the Fed lowers rates by a quarter point, the projections point to just two rate cuts next year compared to the four previously forecast.

The forecast for fewer rate cuts comes as Fed officials expect inflation to come in hotter than previously estimated in 2025, with consumer price growth expected at 2.5 percent compared to the 2.1 percent forecast in September.

The greenback firmed to more than a 3-week high of 154.65 against the yen and near a 4-week high of 1.0353 against the euro, off its early lows of 153.32 and 1.0512, respectively. The next possible resistance for the currency is seen around 158.00 against the yen and 1.02 against the euro.

The greenback strengthened to a 2-day high of 1.2563 against the pound and more than a 5-month high of 0.9010 against the franc, from its early lows of 1.2724 and 0.8917, respectively. The currency is poised to challenge resistance around 1.24 against the pound and 0.92 against the franc.

The greenback climbed to a 4-1/2-year high of 1.4438 against the loonie and more than 2-year highs of 0.6225 against the aussie and 0.5653 against the kiwi, reversing from its early lows of 1.4304, 0.6339 and 0.5758, respectively. The currency is seen finding resistance around 1.47 against the loonie, 0.61 against the aussie and 0.55 against the kiwi.

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