Dollar Ends Mixed After Fed's Decision To Remain Neutral on Rate Outlook
NEW YORK -- In the end, it was the dollar that suffered most from the Federal Reserve's decision to maintain a neutral stance toward further fiscal tightening, despite climbing against the yen.</br></br>U.S. stocks and bonds rallied on the news. Emerging markets and their currencies soared. Commodity-linked currencies jumped, while the Swiss franc, sterling and the euro sprang to their highest levels of the day against the dollar.</br></br>The Fed's 0.25-percentage-point increase of its key lending rate to 5% from 4.75% was expected. But its adoption of a neutral bias wasn't -- at least not in currency markets.</br></br>Thus the dollar, positioned for the rewards it would reap from an interest-rate differential widened by a series of rate hikes, was sold off against most currencies.</br></br>Against the yen, however, the dollar was playing by a different set of rules.