US Fed leaves key rates unchanged; says economy is improving

The US central bank has retained near-zero rate regime to boost the country's fragile recovery and said cheap credit would continue for an "extended period".

After a two-day policy meeting, the Federal Reserve yesterday decided to retain the benchmark rates in the range of 0 to 0.25%.

"(The Fed) continues to anticipate that economic conditions, including low rates of resource utilisation, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period," it said in a statement.

The Federal Open Market Committee (FOMC), which decides on rates, struck a positive note, saying economic activity had continued to pick up in recent months and the housing sector is improving.

However, a key US unemployment report due today could yield more clues about the ailing American consumer economy and demand for Asian exports.