FILE PHOTO: An employee of a bank counts US dollar notes at a branch in Hanoi, Vietnam May 16, 2016. REUTERS/Kham/File Photo

NEW YORK (Reuters) - The U.S. dollar rose to two-year highs on Wednesday after Federal Reserve Chair Jerome Powell, having made the first cut to interest rates since 2008, signaled the move was not the start of a rate-cutting cycle.

Against the euro EUR, the dollar was its highest since May 2017 at $1.1058, last up 0.8%. The dollar index .DXY, which measures the currency against a basket of six rivals, also rose to a two-year high, last up 0.6% to 98.631.

In a widely expected move, the U.S. central bank cut rates by 25 basis points to shore up the economy against risks including global weakness. But in the subsequent press conference, Powell said he viewed the cut as a “mid-cycle policy adjustment” rather than a broader loosening of monetary policy.

“The Fed signaled that it is going to be data dependent but markets were priced for a more dovish outlook which the Fed did not deliver on,” said Collin Martin, director of fixed income at the Schwab Center for Financial Research in New York.

The statement upended expectations of some market participants who anticipated confirmation of further rate cuts. A day prior, traders had forecast at 35% chance of three cuts by the end of the year; on Wednesday afternoon that figure had fallen to 12%, according to CME Group’s FedWatch tool.

“They acknowledged strong labor markets, recent reasonable signs of moderate growth. It still leaves the playing field wide open as to what they’re going to do in future months,” said Tony Bedikian, head of global markets at Citizens Bank in Boston.

The Fed’s policy decision drew dissents from Boston Fed President Eric Rosengren and Kansas City Fed President Esther George who argued for leaving rates unchanged in the face of the current economic expansion, an unemployment rate that is near a 50-year-low, and robust household spending.

The dollar’s larger gains against the euro also reflect market expectations that U.S. assets will benefit if global central banks follow the Fed in cutting rates.

U.S. President Donald Trump is likely to be disappointed the Fed did not deliver the large rate cut he had demanded. Trump has repeatedly harangued the central bank and Powell for not doing enough to help his administration’s efforts to boost economic growth.