The US dollar gained against the majors in New York as trades bid the greenback following a rate increase by the Federal Reserve.
US benchmark rates were raised by 25 basis points to 2.75 percent, marking it a seventh consecutive increase by the Fed. The following market reaction was volatile as the dollar gained against the majors after the Fed statement was more hawkish than usual. A possibility of the word "measured" being dropped as soon as May due to increasing inflationary pressures, boosted the greenback. Given that the Fed is becoming more hawkish in regards to the inflation, markets will pay close attention to the US inflation numbers.
The US Producer Price Index rose by 0.4 percent in February, versus a gain 0.3 percent in January as costs for food and gasoline climbed higher. February's Consumer Price Index is widely expected to print an increase of 0.3 percent, marking it a fifth consecutive rise in consumer prices on increases in commodity prices.
The US dollar was quoted at 1.3073-76 against the euro, 1.8844-49 versus the pound and 105.57-61 against the Japanese yen at 22:30 GMT.
Wall Street stocks retreated today, after the Fed cautioned that persistent inflationary pressures may warrant additional rate hikes in the future.
The Standard and Poor's 500 Index lost 12.07, or 1 percent, to 1171.71. The Dow Jones Industrial Average dropped 94.88, or 0.9 percent, to 10,470.51. The NASDAQ Composite Index declined 18.17, or 0.9 percent, to 1989.34, breaking below the psychologically important 2000 level.
The financial sector was hardest hit, as the rise in interest rates will adversely impact the lending business and reduce the value of their bond holdings. Citigroup, the world's largest bank, fell $1.32 to $44.44. Bank of America Corp., the third-biggest U.S. lender, slipped 64 cents to $43.66.
The utilities sector was also hit hard as the sector relies heavily on borrowing to fund its capital expenditures. CenterPoint Energy Inc., the No. 2 power distributor in Texas, retreated 34 cents to $11.84. Sempra Energy, owner of the biggest U.S. natural-gas utility, fell $1.08 to $39.46.
Electronic Arts Inc., the largest U.S. video-game maker, tumbled $11.20 to $55.15 after the company lowered its full year earnings guidance.
Spiders, Standard and Poor's 500 shares, declined $1.20 to $116.90. QQQQ, Nasdaq-100 tracking shares fell 45 cents to $36.13.
The Standard and Poor's 500 futures contract for June settlement lost 12.10 to 1174.20 on the Chicago Mercantile Exchange. Nasdaq-100 Index futures slipped 14 to 1474.50.
The NYMEX crude oil futures contract for May delivery fell by $1.43 to $56.62 a barrel on speculation that OPEC will boost production faster than expected following last weeks meeting.
The gasoline futures contract for April delivery fell 2.07 cents to $1.5749 a gallon ahead of tomorrow's inventory update.
The COMEX gold futures contract for April delivery fell $1.90 to 429.70 an ounce as the dollar gained against the majors on an interest rate hike.
The Silver futures contract for May delivery fell 2 cents to $7.05 an ounce.
The copper futures contract for rose 0.85 cents to $1.4975 a pound as metal inventories declined to the lowest since February.
US treasuries fell after the Federal Reserve raised its benchmark rate and hinted at additional hikes on rising inflation concerns. The 10-Year Treasury Note fell 3/4 to 95 1/32 with rising by 10 basis points to 4.62 percent. The 10 Year T-Note futures for June delivery fell 19/32 to 108 13/32.