The U.S. Dollar weakened from its three-week highs after the Federal Reserve took a slightly more hawkish policy tone

The U.S. Dollar weakened from its three-week highs against the Yen on Wednesday, quickly erasing gains made after the Federal Reserve took a slightly more hawkish policy tone in signaling two more rate hikes by year-end thanks to a stable outlook for the world’s biggest economy.

The U.S. Dollar index, which measures the strength of the U.S. Dollar versus a group of six other major currencies, rose by 0.28 percent to end the session at 93.55.

As expected, for the second time this year, the Fed raised overnight borrowing costs by a quarter percentage point, between 1.75 and 2.00 percent.

It also ended its pledge to keep rates low enough to boost the economy for “some time” and gestured it would bear above-target inflation at least through 2020. Policy-makers anticipated two more rate increases by the end of this year, compared to one previously.

The preliminary market reaction to the slightly more hawkish Fed tone quickly washed-out, with the focus moving to the ECB’s policy review later on Thursday.

Over in Europe, Although the ECB is widely expected to stand pat this month, some traders speculate it may offer signs on its intentions to begin tapering its bond purchases this year. Others estimate the policymakers may refrain from signaling changes to ECB’s stimulus program given Italy’s political plight and a recent spate of weak data in the Eurozone. The Euro strengthens against the Greenback on Wednesday; the EURUSD rose by 0.4 percent to end the session at 1.1791.

Meanwhile, in the United Kingdom, the Sterling stayed untouched against the U.S. Dollar on Wednesday, to end the session at 1.3373.

Regarding the safe-haven assets, the Japanese Yen weakened against the Greenback on Wednesday; the USDJPY dropped by 0.1 percent to end at 110.33, while the Swiss Franc weakened against the Greenback, the USDCHF fell by 0.12 percent to trade 0.9853 at the close.

Meanwhile, Gold rose against the Greenback on Tuesday; the XAUUSD rose by 0.3 percent to end the session at 1299.35 U.S. Dollars per ounce.

The Canadian Dollar edged higher against its U.S. counterpart on Wednesday, with the currency rebounding from an earlier one-week low as oil prices rose and the Federal Reserve hiked interest rates for the second time this year. The price of oil turned positive after a bigger-than-expected decline in U.S. crude inventories along with surprise drawdowns in gasoline and distillates indicated strong demand in the world’s top oil consumer. The USDCAD dropped by 0.22 percent to close the session at 1.2984.

Over in Australia and New Zealand, The Australian Dollar rose by 0.1 percent on Wednesday to trade at 0.7577 at the close, and the New Zealand Dollar dropped by 0.2 percent to end the session at 0.7023.