Dollar mixed after US rate hike, Fed correction
AFP, May, 2005
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NEW YORK (AFP) — The dollar ended mixed as the impact of a Federal Reserve rate hike was tempered by the release of an unusual correction in the central bank's statement to add a dropped sentence on inflation prospects.
The euro fetched 1.2873 dollars in late European trading from 1.2861 late on Monday in New York.
The dollar was at 105.04 yen, from 105.07 dollars on Monday.
The US currency initially rose on the Fed's expected quarter-point rate hike and the statement, which appeared to acknowledge slowing economic activity as well as growing inflation pressures.
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But markets were unsettled when, nearly two hours after the Fed lifted interest rates, the central bank unexpectedly issued a statement that it made an omission in its original policy statement, leaving out a sentence saying that inflation expectations "remain well-contained."
Bill Hoerter, senior foreign exchange dealer ...
