NEW YORK, March 21 (Xinhua) -- The U.S. dollar index decreased against other major currencies in late trading on Wednesday as investors digested the Federal Reserve's decision to hike interest rates for the first time in 2018.

The U.S. Federal Reserve on Wednesday raised the benchmark interest rate by 25 basis points and signaled two more rate hikes in 2018, citing "strengthened" economic outlook in recent months.

"In view of realized and expected labor market conditions and inflation," the Fed decided to raise the target range for the federal funds rate to 1.5 to 1.75 percent, the central bank said in a statement after concluding a two-day meeting.

Fed officials widely expected that the U.S. economy would grow at a faster pace this and next year, driven by fiscal stimulus and improved overseas demands.

The U.S. economy will grow at 2.7 percent in 2018 and 2.4 percent in 2019, higher than previous projections of 2.5 percent and 2.1 percent, respectively, according to the Fed's forecasts.

On the economic front, U.S. total existing-home sales grew 3.0 percent from 5.38 million in January to a seasonally adjusted annual rate of 5.54 million in February, beating market consensus, the National Association of Realtors reported Wednesday.

The dollar index, which measures the greenback against six major peers, fell 0.69 percent at 89.745 in late trading.

In late New York trading, the euro increased to 1.2329 dollars from 1.2255 dollars in the previous session, and the British pound was up to 1.4136 dollars from 1.4004 U.S. dollars in the previous session. The Australian dollar rose to 0.7760 dollar from 0.7684 dollar.

The U.S. dollar bought 106.12 Japanese yen, lower than 106.44 Japanese yen of the previous session. The U.S. dollar was down to 0.9504 Swiss franc from 0.9553 Swiss franc, and it fell to 1.2916 Canadian dollars from 1.3082 Canadian dollars.