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NEW YORK, June 24 (Reuters) - The U.S. dollar rose against the euro and the yen on Wednesday after the Federal Reserve's Federal Open Market Committee left interest rates unchanged as expected but removed the warning that inflation could be undesirably low.
The Fed also repeated it will evaluate the timing and size of purchases of securities in light of the evolving outlook.
While the benchmark U.S. interbank lending rate is virtually zero, the Fed has focused on driving down other borrowing costs by buying mortgage-related debt and U.S. government bonds.
"They're essentially moving to a little bit more balanced outlook with regard to inflation versus deflation," said Omer Esiner, senior currency analyst at Travelex Global Business Payments in Washington.
"That has suggested to the market that perhaps exit strategies (from quantitative easing) are being contemplated at the Fed. That, initially at least, appears to be a dollar-positive development."
The euro last traded at $1.3908, down 1.2 percent on the day, according to Reuters data. The dollar was at 95.85 yen on electronic trading platform EBS, up 0.7 percent on the day. (Reporting by Nick Olivari and Wanfeng Zhou; Editing by James Dalgleish)