NEW YORK (AFP) - The dollar traded mostly lower, failing to get a lift from a Federal Reserve quarter-point rate hike that had been widely expected and priced into the market.
The euro traded at 1.2330 dollars, from 1.2173 late Monday in New York.
The dollar was trading at 109.73 yen after 109.80 on Monday.
As the market had already priced the rate hike, taking the benchmark Fed funds rate to 1.75 percent, traders focused on the Fed's accompanying statement.
The Federal Open Market Committee statement, similar to its comments in August, suggests that it sees stabilizing US economic conditions that can support higher interest rates.
"After moderating earlier this year, partly in response to the substantial rise in energy prices, output growth appears to have regained some traction, and labor market conditions have improved modestly," the statement said.
The FOMC statement added that inflation remains tame, despite a recent surge in oil prices.
Avery Shenfeld at CIBC World Markets said the Fed did not tip its hand on the future course of rate actions.
"The Fed is comfortable that the economy is doing well enough to cope with moderately higher interest rates, but doesn't have to make the decision about just how strong the economy really is," said Shenfeld.
Some said the reference to tame inflation means a slower pace of rate hikes than anticipated.
"The market thinks that the central bank will be less aggressive in hiking the interest rate in the future, leading to a significant fall in bond yields and mortgage rates recently because the inflation picture has improved significantly," said Sung Won Sohn at Wells Fargo.
In late New York trade, the dollar stood at 1.2537 Swiss francs from 1.2713 Monday.
The pound was at 1.7966 dollars after 1.7857 Monday.