The statement accompanying the rate hike was almost identical to the last one, in December, offering markets no new clues on Fed thinking or the possible timing of either a possible pause in tightening credit or more aggressive raises.
"If anything, it's a slight dollar negative," said Nick Bennenbroek, senior currency strategist at Brown Brothers Harriman in New York. "Some people might have been expecting a more aggressive statement."
The dollar had gained ground against its major counterparts ahead of the rate rise, so, with little new from the Fed to chew on, currency dealers sold the currency back down again.
"They didn't give us any new information and it ended up being a non-event," said Sophia Drossos, currency strategist at Morgan Stanley in New York. "We're right back in the middle of the ranges that have persisted for some time now."
After chopping around, the euro settled around $1.3032, up a few ticks from just before the Fed's decision and statement but down a touch from late Tuesday in New York. The dollar edged lower to 103.66 yen from 103.90 before the Fed, also a touch weaker on the day.
The dollar posted marginal gains against the Swiss francs to trade at 1.1921 francs, while sterling edged up a bit to $1.8852.
Meanwhile, in technical trading, the Australian dollar popped up 0.5 percent to $0.7780.
There are more potentially important events for currency markets in the days ahead.
US President George W. Bush delivers his State of the Union address at 9:00 pm EST on Wednesday (0200 GMT Thursday), which currency dealers will be watching closely for any specific steps to curb a large and growing budget deficit.
The government's loose fiscal policy, together with a widening trade deficit, has been blamed for the dollar's declines over the last three years.
The European Central Bank is expected to leave key interest rates on hold at 2 percent on Thursday, and on Friday, traders will have the latest US jobs report and a speech on the US current account from Fed Chairman Alan Greenspan to digest.