Thursday June 25, 11:46 AM
Dollar mixed after Fed meet, before US data
LONDON (AFP) - The dollar fell against the euro and rose versus the yen on Thursday after the Federal Reserve maintained its stimulative monetary policy aimed at lifting the US economy out of recession.
The market was turning its attention to upcoming US economic data, including a final estimate of first-quarter gross domestic product due Thursday along with weekly jobless figures, followed by personal spending numbers on Friday.
In late morning London trade, the European single currency rose to 1.3978 dollars from 1.3926 dollars in New York late on Wednesday.
Against the Japanese currency, the dollar climbed to 96.43 yen from 95.62 yen on Wednesday.
Dealers sold the safe-haven yen after a meeting of the Federal Open Market Committee (FOMC) -- which decides US monetary policy -- provided no major surprises on Wednesday.
"Players are taking positive cues from the FOMC and stock prices to buy dollars and euros," Jun Kato, a senior dealer at Shinkin Central Bank, told Dow Jones Newswires.
The Fed on Wednesday held its key interest rate steady at close to zero percent and gave no indication that it was preparing to either step up or scale back its efforts to pump liquidity into the financial system.
Some traders had expected the Fed to expand its purchases of debt to spur credit flows, potentially weighing on the greenback.
Others had speculated that the US central bank might outline an exit strategy from its aggressive pump-priming policy as the world's largest economy claws back from recession.
In the event the Fed's statement "puts any exit strategy for monetary and fiscal policy stimulus way into the future," Societe Generale (Paris: FR0000130809 - news) foreign exchange strategist Patrick Bennett wrote in a note.
The Fed statement, which was similar to the one issued on April 29, said the economy remained weak but was showing signs of improvement.
Recent information "suggests that the pace of economic contraction is slowing," it said.
But it added: "Economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."
In London trade on Thursday, the euro was changing hands at 1.3978 dollars against 1.3926 dollars late on Wednesday, at 134.63 yen (133.17), 0.8545 pounds (0.8485) and 1.5263 Swiss francs (1.5296).
The dollar stood at 96.43 yen (95.62) and 1.0931 Swiss francs (1.0982).
The pound was at 1.6377 dollars (1.6408).
On the London Bullion Market, the price of gold grew to 935.45 dollars an ounce from 933.50 dollars an ounce late on Wednesday.
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