US dollar banknotes. (Reuters Photo)

SINGAPORE- The US dollar rose broadly on Thursday, reversing a brief tumble in the immediate aftermath of the Federal Reserve’s outsized interest rate cut that had been largely priced in by markets.

The US central bank on Wednesday kicked off its monetary easing cycle with a larger-than-usual half-percentage-point reduction that Chair Jerome Powell said was meant to show policymakers’ commitment to sustaining a low unemployment rate now that inflation has eased.

While the size of the move had been anticipated by investors in part due to a slew of media reports pointing in that direction ahead of the decision, it defied the expectations of economists polled by Reuters, who were leaning toward a 25-basis-point cut.

Still, markets reacted in a typical “buy the rumor, sell the fact” fashion that kept the dollar on the front foot in Asian trade, as it recouped losses made against its peers in the run up to the Fed meeting.

Against the yen the greenback gained as much as 1.2 percent  to hit an intraday high of 143.95 earlier in the session. It last traded 0.62 percent  higher at 143.15 yen.

“There was a sharp squeeze in short dollar/yen positions as markets took profit post-Fed,” said Christopher Wong, currency strategist at OCBC.

The Swiss franc fell about 0.3 percent  to 0.8487 per dollar, while the euro dipped 0.01 percent  to $1.1117, away from a three-week high hit in the previous session.

The dollar index which measures the greenback against a basket of six peers, rose marginally to 101.03, having slid to an over one-year low of 100.21 in the previous session.

“Obviously, (there was) a lot of volatility on the announcement, but in terms of the pricing action and the information that came out … it’s not really that controversial in a sense,” said Rodrigo Catril, senior FX strategist at National Australia Bank (NAB).