Dollar Drops on News of FOMC Interest Rate Hike

The Federal Open Market Committee raised the target federal fund rate 25 basis points, to 5.25%. Although, their statement seems to indicate that this may be the last of any rate hikes for a while, as "economic growth is moderating from its quite strong pace earlier this year."

As a result of the rate hike, the US Dollar fell sharply. The Euro was at $1.2527 before the statement but spiked to $1.2660 later in the afternoon.

Read the June 29, 2006 FRB Press Release for more.