FOREX-Dollar retains strength against peers after Fed rate decision

By Chibuike Oguh

NEW YORK, May 7 (Reuters) - The U.S. dollar remained slightly stronger against major currencies including the yen and the euro on Wednesday after the Federal Reserve left interest rates unchanged, in line with market expectations.

The Fed kept its benchmark interest rate steady in the 4.25%-4.50% range, but said that the risks of higher inflation and unemployment had risen and that the U.S. economic outlook remains uncertain.

"They were a little more hawkish than a lot of the market expected and they didn't really change or water down any of the views on inflation being above average or the jobs market selling at a low level," said Marvin Loh, senior global market strategist at State Street in Boston.

"I still think we're in an extended hold period until data tells them that they need to do something and/or we get a lot more trade clarity," Loh added.

The greenback was up 0.55% versus the yen at 143.190 JPY=, breaking a three-day falling streak, with Japanese markets reopening after a two-day holiday.