Dollar sinks after Fed plans more bond purchases

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Associated Press

Posted on December 12, 2012 at 1:01 PM

Updated Wednesday, Dec 12 at 1:02 PM

NEW YORK (AP) — The dollar is rising against other currencies after the Federal Reserve extended a bond-purchasing program into 2013.

The Fed also says it will keep interest rates extremely low for as long as the unemployment rate remains high and inflation remains under control. That's a change from its previous policy of having ending dates for its low-rate policy.

The Fed's plans imply 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 $1.3084 Wednesday from $1.3003 late Tuesday.

The British pound rose to $1.6157 from $1.6114. The dollar also fell against the Swiss franc and Canadian dollar.

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