The Fed voted to increase rates on Wednesday to 1.25% and maintained its own forecast that rates would rise at least one more time in 2017.
Fed officials now expect the USA unemployment rate to end the year at 4.3 percent, down from the 4.5 percent they predicted in March.
Unemployment fell to just 4.3% during May, its lowest point in 16 years.
The eurozone currency plunged to 1.1143 against its American counterpart on Thursday, the lowest level in a fortnight.
The U.S. Federal Reserve, acting as America's central bank, took another step towards normalising monetary policy, by increasing interest rates to a 1% to 1.25% range.
If it truly is indicative of a slowing economy this may put the Dollars at risk of further retreat as it may jeopardize the FOMC outlook of one additional rate hike beyond June, (many investors think the September meeting looks the most likely date for this 3rd hike).
The Federal Reserve raised interest rates for the third time since December, something investors had widely expected based on the Fed's recent statements.
The Fed also outlined its plan to reduce its $4.2 trillion (€3.7tn) portfolio of Treasury bonds and mortgage-backed securities, chiefly purchased after the financial crisis hit.
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USA stocks rose after the Fed announcement, while the dollar reversed some of its earlier losses.
The euro was down 0.3 percent at $1.1183, a six-day low, while the yen was flat at 109.58 per dollar.
Economist-expert Parviz Heydarov said that the US economy is now completely out of a hard situation.
The central bank cut its inflation forecast for 2017 to 1.6 per cent from 1.9 per cent as measured by the PCE index.
"The committee now expects to begin implementing a balance sheet normalisation programme this year, provided that the economy evolves broadly as anticipated". Shares in Southeast Asia also were mostly lower.
KEEPING SCORE: Japan's Nikkei 225 stock index fell 0.2 percent to 19,838.86 and South Korea's Kospi sank 0.6 percent to 2,358.66.
In a statement Wednesday, the policymakers said that "the labor market has continued to strengthen and that economic activity has been rising moderately so far this year".
The BottomLine: While the Federal Reserve has looked beyond recent data disappointments, the failure to see better growth in the second half could put additional rate hikes on hold and delay the start of balance sheet reductions.