Dollar rebounds after Fed-induced plunge

[NEW YORK] The dollar bounced back Friday a day after the Federal Reserve's reluctance to hike interest rates sent it tumbling.

The dollar powered up 1.2 per cent to US$1.1299 against the euro and scored a modest gain on the pound while holding flat against the yen.

Most analysts said the US currency overshot the mark on Thursday in sinking after the Fed declined again to move off the zero mark for its benchmark federal funds rate.

While the Fed said it had its eye on the global economic slowdown and market volatility, it also noted US growth remains solid and generally foresaw a rate increase by the end of the year.

The euro meanwhile fell against the yen and pound, as well as the Swiss franc, as polls showed leftist former prime minister Alexis Tsipras holding a slim lead over his conservative rival in hard-up Greece.

The results of the poll could determine how the country's third EU bailout program - which again requires painful reforms - goes ahead.

AFP