The dollar recovered against the euro and yen on Thursday after the Federal Reserve signalled an end to its rate-cutting policy, analysts said.
In European trading, the euro fell to 1.5755 dollars from 1.5789 in New York late on Wednesday.
Against the Japanese currency, the dollar rose to 103.30 yen from 103.02.
The dollar had tracked equity markets lower in recent days amid record-breaking crude oil, which struck an all-time high of 135.14 dollars a barrel on Thursday.
Minutes released by the US Federal Reserve on Wednesday signalled that further interest rate cuts are doubtful in the United States without a "significant weakening" of the economic outlook.
"The minutes implicitly suggest that US rates have bottomed out and would only be cut in an emergency, in the case of capital markets falling or the economy showing much slower growth rates than currently projected," said Hans Redeker at BNP Paribas.
In its minutes from the April 29-30 policy meeting, the Federal Reserve also slashed its 2008 growth forecast for the US economy to a range of 0.3 to 1.2 percent.
The US central bank made a sharp downward revision to its prior forecast of 1.3 to 2.0 percent growth for 2008 in an economic update accompanying the minutes from its April 29-30 policy meeting.
The Fed cut its key interest rate by 25 basis points at the meeting, the smallest reduction this year.
"We are seeing less possibility of rate hikes in the US, while the possibility of rate hikes than rate cuts in Europe is rising," said David Mann, currency strategist at Standard Chartered Bank.
Meanwhile, the British pound was given a boost by official economic data which showed consumer spending in Britain is not falling as rapidly as feared and that industry's producer prices continue to hit new records, traders said.
The combination of Thursday's data releases further diminished the chances of a rate cut in June to give a lift to economic growth, they added.
In London on Thursday, the euro changed hands at 1.5755 dollars against 1.5789 late on Wednesday, at 162.76 yen (162.71), 0.7972 pounds (0.8004) and 1.6188 Swiss francs (1.6186).
The dollar stood at 103.30 yen (103.02) and 1.0274 Swiss francs (1.0250).
The pound was at 1.9761 dollars (1.9728).
On the London Bullion Market, the price of gold jumped to 929.30 dollars per ounce from 923 dollars late on Wednesday.
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AFP
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