FOREX-Dollar drops after Fed hikes rates as expected

(Recasts with Fed decision, adds quote, updates prices) By Karen Brettell NEW YORK, May 4 (Reuters) – The dollar fell in volatile trading against a basket of currencies on Wednesday after the Federal Reserve raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years. The rate increase was widely expected. The U.S. central bank set its target federal funds rate to a range between 0.75% and 1% in a unanimous decision, with further rises in borrowing costs of perhaps similar magnitude likely to follow. The Fed also said that its $9 trillion balance sheet would be allowed to decline by $47.5 billion per month in June, July and August and the reduction would increase to as much as $95 billion per month in September. The dollar index was last at 103.20, after getting as low as 103.07 immediately after the Fed statement. The euro rose to $1.0553, after briefly reaching$1.0573. The dollar was 129.87 against the Japanese yen, after briefly dropping to 129.75. ======================================================== Currency bid prices at 2:16PM (1816 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index 103.2000 103.4400 -0.21% 7.879% +103.6000 +103.0700 Euro/Dollar $1.0553 $1.0519 +0.34% -7.16% +$1.0573 +$1.0507 Dollar/Yen 129.8650 130.1300 -0.19% +12.82% +130.2000 +129.7500 Euro/Yen 137.07 136.92 +0.11% +5.19% +137.2700 +136.7200 Dollar/Swiss 0.9809 0.9788 +0.21% +7.54% +0.9846 +0.9784 Sterling/Dollar $1.2507 $1.2496 +0.10% -7.51% +$1.2537 +$1.2468 Dollar/Canadian 1.2799 1.2842 -0.34% +1.22% +1.2853 +1.2787 Aussie/Dollar $0.7167 $0.7096 +0.97% -1.44% +$0.7182 +$0.7089 Euro/Swiss 1.0351 1.0295 +0.54% -0.15% +1.0376 +1.0285 Euro/Sterling 0.8436 0.8418 +0.21% +0.44% +0.8449 +0.8404 NZ $0.6464 $0.6436 +0.40% -5.59% +$0.6475 +$0.6423 Dollar/Dollar Dollar/Norway 9.3890 9.4000 -0.31% +6.37% +9.4265 +9.3650 Euro/Norway 9.9113 9.8823 +0.29% -1.01% +9.9366 +9.8673 Dollar/Sweden 9.8506 9.8606 +0.18% +9.21% +9.9010 +9.8393 Euro/Sweden 10.3970 10.3779 +0.18% +1.59% +10.4121 +10.3750 (Editing by Nick Zieminski)