Dollar holds on to gains after Fed report

AP News
Posted: Feb 21, 2013 4:45 PM

NEW YORK (AP) — The dollar held on to most of its gains Thursday after the Federal Reserve signaled that it's considering slowing or ending its efforts to support the economy.

Some of the Fed's policymakers fear that the bank's open-ended bond purchases could cause inflation. If the Fed curtails the program, it could lead to higher U.S. interest rates and a stronger dollar.

The euro dropped to its weakest point in about six weeks, below $1.32, after a gauge of business activity in Europe by the financial information company Markit dropped in February.

In late trading in New York, the euro was worth $1.3172 compared with $1.3281 late Wednesday. The euro is used by 17 European countries, including Greece, Ireland and Portugal, which have been bailed out by their wealthier neighbors.

The British pound recovered from a 2½-year low near $1.51, trading at $1.5242 compared with $1.5240. The dollar dropped to 93.12 Japanese yen from 93.81.

The dollar also rose versus the Canadian dollar, the Swiss franc and other major currencies.