Date: Thursday 21 Jun 2012
The euro shrugged off early losses to rise against the dollar, in choppy trading, as markets assessed the Federal Reserve's decision to continue with "Operation Twist".
The US Federal Open Market Committee announced it will keep interest rates on hold and plans to spend $267bn on its bond purchase operation to the end of 2012.
At the end of its widely anticipated two-day meeting, the FOMC also cut its growth and inflation forecasts and said unemployment will remain above 8% throughout 2012.
The euro had topped $1.27 after German Chancellor Angela Merkel's comments on Tuesday that the European Financial Stability Facility could possibility be used to buy Eurozone sovereign bonds. After a weak start to Wednesday's session, the single currency traded up 0.3% at $1.2722.
The dollar index, which measures the dollar against a basket of six currencies, climbed to 81.567 versus 81.365 on Tuesday.
Markets also kept an eye on Greece as leaders agreed a deal to form a coalition government. Meanwhile at the G20 summit in Mexico world leaders said the Eurozone was taking 'important steps' that would lead to sustainable borrowing costs.
Against the Japanese yen, the greenback bought ¥79.47 versus ¥79.05 the previous session.
Sterling fell against the dollar to trade at $1.5703 from $1.5740 on Tuesday.
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