September 26, 2018 / 7:07 PM / in 3 months

FOREX-Dollar rises after Fed raises rates, flags more hikes

    * Fed raises rates, removes "accommodative" in statement
    * Dollar initially falls, then rises again
    * GRAPHIC-World FX rates in 2018: tmsnrt.rs/2egbfVh

 (Recasts with Fed decision, adds comments, updates prices, FX table)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, Sept 26 (Reuters) - The dollar edged higher on Wednesday in choppy trading
after the Federal Reserve raised interest rates as expected for the eighth time, flagged
more rate hikes and signaled the end of the "accommodative" policy era.
    The greenback briefly fell against the euro and yen after the release of the Fed
statement but slowly inched higher as market participants digested the statement.
    Fed policymakers lifted the benchmark overnight lending rate by a quarter of a
percentage point to a range of 2.00 percent to 2.25 percent. The central bank also removed
from its policy statement a description of monetary policy as remaining accommodative.

    "Today's dropping of keyword 'accommodative' from its policy statement ensures the Fed
remains on course for further hikes as unemployment heads towards multi decade lows," said
Robert Sierra, director at Fitch Ratings. 
    "The Fed continues to be very much focused on strong domestic conditions and neither
trade concerns nor recent emerging market turbulence affected today's decision," he added.
    For Mark McCormick, head of North American FX strategy, at TD Securities in Toronto,
however, the removal of the word "accommodative" is a dovish signal and was the reason for
the initial fall in the dollar. 
    "To me, it means that the Fed is more or less in a neutral stance and is probably
close to being done raising rates," McCormick said.
    Federal Reserve Chairman Jerome Powell clarified that the removal of "accommodative"
in the statement is a sign that monetary policy is proceeding in line with expectations.

    In afternoon trading, the dollar index, which measures the U.S. unit against
six major currencies, was up 0.1 percent at 94.179
    The euro briefly hit session highs versus the dollar after the decision, before
falling to $1.1734, down 0.3 percent.
    Against the yen, the dollar rose was up slightly at 113.01 yen.
    In the statement, the Fed still foresees another rate hike in December, three more
next year, and one increase in 2020. 
    
    ========================================================
    Currency bid prices at 1451 EDT (1851 GMT):
 Description      RIC         Last       U.S.      Pct       YTD Pct  High Bid   Low Bid
                                         Close     Change    Change              
                                         Previous                                
                                         Session                                 
 Euro/Dollar      EUR=        $1.1744    $1.1771   -0.23     -2.10    +1.1797    +1.1727
 Dollar/Yen       JPY=        112.9600   112.9700  -0.01     +0.26    +113.1300  +112.7500
 Euro/Yen         EURJPY=     132.69     132.91    -0.17     -1.84    +133.0900  +132.5300
 Dollar/Swiss     CHF=        0.9662     0.9649    +0.13     -0.82    +0.9701    +0.9624
 Sterling/Dollar  GBP=        1.3168     1.3181    -0.10     -2.55    +1.3217    +1.3139
 Dollar/Canadian  CAD=        1.3015     1.2951    +0.49     +3.48    +1.3025    +1.2944
 Australian/Doll  AUD=        0.7260     0.7250    +0.14     -6.94    +0.7314    +0.7241
 ar                                                                              
 Euro/Swiss       EURCHF=     1.1351     1.1352    -0.01     -2.89    +1.1385    +1.1342
 Euro/Sterling    EURGBP=     0.8916     0.8924    -0.09     +0.37    +0.8945    +0.8902
 NZ               NZD=        0.6653     0.6645    +0.12     -6.11    +0.6694    +0.6636
 Dollar/Dollar                                                                   
 Dollar/Norway    NOK=        8.1054     8.1277    -0.27     -1.24    +8.1375    +8.0832
 Euro/Norway      EURNOK=     9.5216     9.5647    -0.45     -3.32    +9.5694    +9.5170
 Dollar/Sweden    SEK=        8.8060     8.8071    -0.22     +7.37    +8.8416    +8.7846
 Euro/Sweden      EURSEK=     10.3434    10.3660   -0.22     +5.13    +10.3826   +10.3420
 
    
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Bernadette Baum and Cynthia Osterman)
  
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