NEW YORK, New York - The U.S. dollar crumbled on Thursday after first posting gains. The late afternoon sell off came despite a Federal Reserve interest rate hike and Chair Jerome Powell dashing hopes of an interest rate cut sometime this year.

The FOMC Committee earlier indicated interest rate hikes would persist until inflation was tamed back to two percent.

"Given our outlook, I don't see us cutting rates this year if our outlook comes true," Powell said at a press conference following the FOMC decision.

"If we do see inflation coming down much more quickly, that will play into our policy setting, of course," he said.

Soon after the FOMC decision the U.S. dollar began drifting higher, pushing the euro to the 1.0900 level and the British pound below 1.2300. The Australian dollar had crumbled to be approaching 0.7050. However, as the afternoon wore on, buyers began weighing into the market.

"If you were hoping for clear signs of an upcoming pause in interest rate hikes, you were left wanting. The Federal Reserve retained the phrase 'ongoing increases' in their statement, leaving their options open depending on what upcoming economic data says," Greg McBride, chief financial analyst at Bankrate told Reuters news agency Wednesday.

Approaching the U.S. close Wednesday, the euro, which after approaching 1.0900 at one point, and rallied to touch 1.1001, retreated slightly to 1.0986. The British pound, which was changing hands below 1.2300 earlier, jumped to 1.2370 around the U.S. close.

The Japanese yen was sharply higher at 128.86. The Swiss franc accelerated to 0.9085.

The Canadian dollar rose to 1.3294. The Australian dollar rebounded to 0.7132. The New Zealand dollar firmed to 0.6497.

U.S. stocks had a roller coaster ride with the Dow Jones prior to the rate decision being down hundreds of points. By the close, though, it was back in the black.

The benchmark index closed up 6.92 points or 0.02 percent at 34,092.96.

The Nasdaq Composite surged 231.77 points or 2.00 percent to close Wednesday at 11,816.32.

The Standard and Poor's 500 jumped 42.61 points or 1.05 percent to 4,119.21.