By Alexander Martin
Fed disappoints investors' expectations of more hawkish tone
NEW YORK (MarketWatch)--The dollar pared gains against the yen
and most major currencies following a statement from the Federal
Reserve delivered Wednesday afternoon in which the central bank
said it believes the labor market remains unstable despite recent
signs that economic growth is accelerating.
Investors are eagerly awaiting any sign that the Fed may raise
interest rates sooner than expected, as this would have a bullish
effect on the dollar.
The dollar was at 102.85 yen Wednesday afternoon, up from
Yen102.10 Tuesday evening.
The euro was trading at $1.3389, down from $1.3411 late
Tuesday.
"People were thinking the Fed might say more about tightening
given that job numbers and other data have improved, but the FOMC
essentially made it clear that the Fed won't be tightening any time
soon," said Jonathan Lewis, chief investment officer at Samson
Capital Advisors. "The announcement has put a cap on the extent of
the dollar rally."
The ICE U.S. dollar index, a measure of the greenback's
performance against six other currencies, was at 81.4010 Wednesday,
up from 81.2140 Tuesday.
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