Dollar is mixed as Fed holds rate at 2%
Greenback makes small moves as Fed leaves lending rate unchanged.
NEW YORK (CNNMoney.com) -- The dollar shifted higher against the Japanese yen but edged lower versus the euro Tuesday, following the announcement by members of the Federal Reserve that they would keep interest rates steady.
The dollar rose slightly to ¥105.97 from ¥105.08 15 minutes prior to the announcement. The dollar traded at ¥105.44 late Monday.
The 15-country euro rose to $1.4157 from $1.4150 15 minutes prior to the announcement. The euro weighed in at $1.4275 late Monday.
The dollar recorded small fluctuations following the announcement because many speculators have retreated from the market, cutting the volume of trade.
"The market is trading with very few speculators. There's customer business, but very few people are taking large positions on this," Benfer said. "It's not a market that has strong conviction," said Tom Benfer, director, foreign exchange of BMO Capital Markets.
The Fed and other central banks on Tuesday pumped $50 billion into the U.S. financial system in an attempt to ease the credit crunch. That comes in addition to the Federal Reserve Bank of New York's injection of $20 billion into the system to calm investors and soothe the markets.
On Tuesday, crude oil settled down $4.56 at $91.15.
In August, gas prices decreased 4.2% following a 4.1% increase in July. Even with the relief in August, however, gas prices remained 35.6% higher than in August 2007.
Overall consumer prices rose 5.4% in August from a year ago. That's just down from the 17-year 5.6% high reached in July.