LONDON, Nov 1: The dollar clawed back some ground against the euro on Thursday after slumping to a record low overnight as the Federal Reserve cut US interest rates as expected.

In European trading, the euro fell to $1.4433 from $1.4480 in New York late on Wednesday.

After the Federal Open Market Committee (FOMC) had decided to cut US interest rates by a quarter-point to 4.5 per cent, the euro struck an all-time high of $1.4504.

“The dollar has derived support from the FOMC’s decision to move to a neutral policy stance after cutting” rates, said Lee Hardman, currency economist at The Bank of Tokyo-Mitsubishi.

“In the near-term the shift in interest rate expectations in favour of the US is likely to forestall further dollar depreciation, something the FOMC may have been mindful of when compiling Wednesday’s statement,” he added.

Although the Fed’s cut had been widely anticipated, the dollar fell sharply after the US central bank decided in a 9-1 vote to lower its fed funds rates.

The Australian dollar hit a fresh 23-year high against the greenback in the wake of the move while the British pound reached levels last seen in 1981.—AFP