(MENAFN- AFP) The dollar tumbled Wednesday while US stocks dipped after the Federal Reserve lifted interest rates but suggested it would not speed up the pace of additional hikes in 2018.
The greenback's fall suggested disappointment in the foreign exchange market that the US central bank suggested it was on pace for just three rate hikes in 2018 and not four.
Earlier, European equity markets finished little changed, while oil prices rallied on data showing a drop in US petroleum inventories.
The Fed, as expected, raised its key lending rate, citing the improved US growth and employment outlook.
Newly-installed Fed Chairman Jerome Powell pointed to factors that have boosted the economic outlook in recent months, including "more stimulative" fiscal policy, in the wake of the massive tax cuts Congress passed in December.
In addition, he said "ongoing job gains are boosting incomes and confidence (and) foreign growth is on a firm trajectory."
US stocks initially rallied on the Fed announcement.
But equities later pulled back during Powell's news conference in which he was asked repeatedly about risks to the economic outlook, including from a possible trade war between the US and China. Investors also fixated on the Fed's somewhat more aggressive plans for rate hikes after 2018, analysts said.
The Dow finished down 0.2 percent at 24,682.31 after rallying as high as 24,977.65 shortly after the Fed announcement.
- Dollar falls -
The dollar's trajectory was more decisive, falling after the Fed announcement and not moving significantly after that.
"While there were some aspects of today's announcement that were perhaps more hawkish than some expected, ultimately the currency market appeared to focus on the unchanged projection of a total of three rate hikes for 2018, which perhaps disappointed some who expected policymakers to signal a more aggressive near-term rate path," said Nick Bennenbroek, head of currency strategy at Wells Fargo Securities.
Earlier, European markets avoided major swings, with Frankfurt ending flat and London and Paris both down modestly.
Brent oil prices rose three percent to $69.47 per barrel after a US petroleum inventory report showed lower commercial inventories.
The data added to optimism about oil prices after a committee working for the Russia-OPEC group that has capped output on Tuesday said global supplies would balance with demand by the end of September, sooner than previous forecasts.
Petroleum-linked shares jumped, with Dow members Exxon Mobil and Chevron rising 1.4 percent and 2.2 percent respectively.
But packaged food companies stumbled after General Mills warned that steepening commodity costs would dent profits. General Mills tumbled 8.9 percent while Kellogg dropped 4.0 percent, Campbell Soup 2.2 percent and Mondelez International 0.8 percent.
Tesla Motors gained 1.9 percent after shareholders approved a pay package worth potentially billions of dollars for chief executive Elon Musk if the company meets its targets for operations and market capitalization.
- Key figures around 2100 GMT -
New York - Dow: DOWN 0.2 percent at 24,682.31 (close)
New York - S & P 500: DOWN 0.2 percent at 2,711.93 (close)
New York - Nasdaq: DOWN 0.3 percent at 7,345.28 (close)
London - FTSE 100: DOWN 0.3 percent at 7,038.97 (close)
Frankfurt - DAX 30: FLAT at 12,309.15 (close)
Paris - CAC 40: DOWN 0.2 percent at 5,239.74, (close)
EURO STOXX 50: DOWN 0.3 percent at 3,401.04 (close)
Hong Kong - Hang Seng: DOWN 0.4 percent at 31,414.52 (close)
Tokyo - Nikkei 225: Closed for public holiday
Euro/dollar: UP at $1.2343 from $1.2242 at 2100 GMT Tuesday
Pound/dollar: UP at $1.4148 from $1.3998
Dollar/yen: DOWN at 105.95 yen from 106.53 yen
Oil - Brent North Sea: UP $2.05 at $69.47 per barrel
Oil - West Texas Intermediate: UP $1.63 at $65.17
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