Dollar Sinks After Fed Plans More Bond Purchases

NEW YORK (AP) â¿¿ The dollar sank Wednesday against most major currencies after the Federal Reserve pledged to keep interest rates super-low until the unemployment rate falls below 6.5 percent.

The unemployment rate in November was 7.7 percent. The announcement was a shift from the Fed's previous policy, which was to keep interest rates super-low until at least the middle of 2015.

The Fed plan is contingent on low inflation. It implies a long period of low rates in the U.S., a key factor in keeping the value of the dollar low against other currencies that carry higher rates, such as the euro.

The euro rose to $1.3063 Wednesday from $1.3003 late Tuesday.

The British pound rose to $1.6139 from $1.6111. The dollar also slipped to 0.9263 Swiss franc from 0.9333, and to 98.43 Canadian cents from 98.66. The dollar rose to 83.20 Japanese yen from 82.50 yen.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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