Dollar soars against euro after Fed minutes

AP News
Posted: Apr 03, 2012 3:58 PM
Dollar soars against euro after Fed minutes

The dollar rose sharply against the euro Tuesday after the Federal Reserve appeared less likely to launch another round of bond-buying to help the economy.

In minutes from the Fed's March meeting, policymakers said they believed the economy is improving. Some members were concerned that gains in the job market could fade, but only two said more economic stimulus was needed.

The Fed has launched two rounds of bond purchases, most recently in August 2010, to lower long-term interest rates and make stocks appear more attractive to investors.

Lower interest rates can weigh on a currency by reducing the returns investors get from holding it. With a third round of bond-buying less likely, investors bought dollars.

The euro fell to $1.3217 late Tuesday from $1.3332 late Monday.

In other trading Tuesday, the dollar was also higher against most other currencies. The British pound fell to $1.5896 from $1.6042.

The dollar rose to 82.86 Japanese yen from 82.18, to 0.9101 Swiss franc from 0.9033 Swiss franc and to 99.15 Canadian cents from 98.93 Canadian cents.