Dollar index rises after Fed announcement

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NEW YORK (Reuters) - The dollar index turned up for the day on Wednesday shortly after the U.S. Federal Reserve raised interest rates by the expected quarter of a percentage point and projected its policy rate would go as high as 2% by the end of the year.

The index against major currencies rose about 0.1% on the announcement after having been down 0.2% shortly before.

Earlier in the day dollar had fallen 0.6% as the euro, a major component of the index, climbed amid signs of compromise by Russia and Ukraine in “more realistic” peace talks.

The euro was last up 0.1% to $1.0964.

Moscow said the sides were discussing a status for Ukraine similar to that of Austria or Sweden, both members of the European Union that are outside the NATO military alliance. Ukraine’s chief negotiator said it would give Kyiv binding international security guarantees to prevent future attacks.

The Russian ruble was last down 7% against the greenback.

Sterling rose 0.2% to $1.3068, after hitting a 16-month low of $1.3000 on Tuesday. Money markets expect the Bank of England to raise rates by another quarter point on Thursday.

The dollar gained 0.5% on the Japanese yen to 118.9150, the highest in more than five years.

The Bank of Japan is expected on Friday to leave ultra-loose policy settings in place.

The commodity-sensitive Australian dollar added 0.4% to $0.7228.

Bitcoin was last up 1% on the day to $39,849.

Currency bid prices at 2:14PM (1814 GMT)

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