US dollar weakens as Fed leaves rates untouched

[WASHINGTON] The dollar fell against the euro and British pound on Wednesday as the Federal Reserve left interest rates untouched.

The Fed's policy board said the US economy was improving and left open the possibility of a rate hike as soon as September. But analysts said some market actors expected stronger signs of optimism in the Fed's statement.

The committee noted gains in economic growth and job creation but said inflation remained low. On the other hand, it said threats to the US economy had diminished.

In June, jitters over the looming British vote on had helped persuade the committee not to raise rates.

The dollar was down almost a penny against the euro at US$1.1062 at 2100 GMT and by a similar amount against the British pound, which bought US$1.3224.

However, the dollar strengthened against the yen, rising to 105.31 from 104.64 on Tuesday.

In Japan, officials are also considering economic stimulus measures to revive the world's third-largest economy, which has long been mired in deflation. The Bank of Japan winds up its policy meeting on Friday.

AFP