NEW YORK: The dollar held gains against the euro on Wednesday after the Federal Reserve delivered no surprises at its policy meeting, sticking to its stimulus plan to boost a still sluggish US economy and keeping rates low for some time.
The Fed said it is keeping its bond-buying program in nplace until the job market improves. It said the economy was slightly firmer but the unemployment rate remained elevated.
"The bank appeared content to sit idle and see how its latest monetary prescriptions work their way through the economy," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, noting that the dollar reacted little to the Fed statement.
Jim O'Sullivan, chief economist at High Frequency Economics, pointed out that the Fed was only too happy to keep this week's meeting a non-event after the big changes in September and with the US presidential election less than two weeks away.
Analysts said the next major decision point for the Fed will be its December policy meeting, when it will have to decide whether to maintain monthly purchases of longer-term securities at the current pace of about $85 billion per month.
The euro was last down 0.1 percent against the dollar at $1.2971, declining for a second straight session. Earlier it fell to a one-week low of $1.2918.
The euro zone's common currency held between the recent range of $1.2800 to $1.3170 in which it has traded in since mid-September, while strong technical support was expected around $1.2835, the 200-day moving average.
Expectations that indebted Spain is moving closer to asking for a bailout, which would enable the European Central Bank to buy its bonds and lower borrowing costs, have helped support the euro in recent weeks. But uncertainty about the timing of such a request has deterred investors from chasing the currency higher.
ECB President Mario Draghi made a robust defense of his bond-buying plan to ease the euro zone's debt crisis, telling German lawmakers their fears of illegal funding of governments or stoking inflation are misplaced.
The euro also hit a one-week low against the yen at 102.96 yen, and was last at 103.48, down 0.2 percent.
Against the yen, the dollar was flat to slightly lower at 79.77 yen.
The New Zealand dollar, meanwhile, spiked to session highs after the Reserve Bank of New Zealand held rates as expected, but suggested the possibility for interest rates to rise in the coming months.
RBNZ's new governor, Graeme Wheeler, held rates at a record low 2.5 percent, but said he expects inflation to return to the central bank's target range.
The Kiwi dollar rose as high as US$0.8199 and was last at US$0.8195, up 1 percent on the day.
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