Dollar falls after Fed keeps rate unchanged

NEW YORK, June 25 (Xinhua) -- The dollar fell against most major currencies on Wednesday after the U.S. Federal Reserve decided to leave the key interest rate unchanged.

The central bank announced that it was keeping the federal funds rate at 2 percent, ending a series of rate cuts to bolster the economy in the past nine months.

The Fed cited a heightened risk of inflation, which could lead to rate increases. But if failed to give a strong signal that it would raise interest rates later this year.

Analysts said the Fed may delay the first rate hike until December rather than August as some investors expected before the decision.

The dollar was also hit by comments from European Central Bank (ECB) and a U.S. report showed that sales of new homes tumbled in May.

"We could decide to move our rates by a small amount in our next meeting," ECB President Jean-Claude Trichet said on Wednesday.

The U.S. Commerce Department reported that new homes were sold at a seasonally adjusted annual rate of 512,000 units in May, down2.5 percent from the April level.

The euro bought 1.5667 dollars in late New York trading compared with 1.5579 dollars it bought late Tuesday. The British pound rose to 1.9727 dollars from 1.9697 dollars.

The dollar fell to 1.0362 Swiss francs from 1.0406 Swiss francs, and rose to 107.93 Japanese yen from 107.90 Japanese yen. It fell to 1.0095 Canadian dollars from 1.0128 Canadian dollars.