The dollar fell against major currencies on Wednesday after the Federal Reserve made an expected quarter point cut in its benchmark interest rate to 2 percent but left open the possibility to further rate cuts, raising concerns about inflation.

The dollar dropped to 1.5620 per euro at 4:14 p.m. in New York, from $1.5572 yesterday. The U.S. currency traded at 103.98 yen, from 104.02. The euro was at 162.36, from 161.97 yesterday.

In its statement, the Fed said that the substantial easing of monetary policy until now combined with other measures should help promote economic growth. However the Fed said it would act as needed to promote growth, indicating possible additional moves.

Futures traders on the Chicago Board of Trade betting ahead of the rate cut had anticipated a 78 percent chance of a quarter point cut and a 71 percent chance that the Fed would keep the rates steady until June, according to analysis by Bloomberg.

Earlier, the dollar rose slightly after a government report indicated a better-than-expected increase in the gross domestic product for March. GDP data showed 0.6 percent growth, beating expectations of 0.2 percent. Inflation also grew slightly, with the GDP price index showing a rate of 2.6 percent annual rate.