Dollar rises as Fed keeps interest rates on hold

[NEW YORK] The US dollar pushed higher against other major currencies Wednesday after the Federal Reserve kept interest rates unchanged but left the path clear for a hike in the coming months.

The dollar pushed up 0.6 per cent on the dollar to US$1.0990, and about 0.2 per cent on the yen, to 123.91 yen.

The Fed gave no new signals on its intentions after a two-day policy meeting, but remained relatively upbeat on the economy.

Analysts said that if US jobs data remains strong for the next six weeks, the Fed could easily undertake its first rate increase in nine years in its September meeting.

Fed policymakers "held steady in their data-dependent strategy, noting that a rate hike would be appropriate once they have seen 'some further improvement in the labor market,'" said Kim Chase at BBVA Research.

"This gives them some room to play with incoming economic data as long as 'some' of the indicators hint at improving conditions."

Although the Fed was not as hawkish in its policy statement as some expected, said Kathy Lien of BK Asset Management, "investors scooped up dollars on the notion that September tightening remains on the table."

AFP