Dollar gives up some gains after rally

NEW YORK: The dollar fell back slightly against the euro on Friday, after the greenback surged in a flight-to-safety rally the day before.

The euro rose slightly to $1.3503 from $1.3466 on Thursday -- when the single European currency struck an eight-month low of $1.3385.

Traders took a wait-and-see approach after the Federal Reserve's announcement it would try to push down interest rates by divesting $400 billion from short-term bonds and pump the cash back into longer-term bonds.

"After the Federal Reserve announcement on Wednesday there is a lot of risk that has been taken off the table, so markets participants have not inclined to take big positions before the weekend," said Samarjit Shankar of the Bank of New York Mellon.

But the euro was not out of the woods yet.

"There is still a considerable uncertainty about the eurozone debt crisis," said Shankar, "if there is further negative news flow you could see the euro being further undermined."

The euro also nudged up to 103.31 yen from 102.60 on Thursday, when it also hit a 10-year trough of 102.22.

The dollar rose against the yen to 76.50 from 76.20 yen on Thursday.

Meanwhile the pound rose to $1.5463 from $1.5343 and the dollar fell to 0.9042 Swiss francs from 0.9078 francs.

Copyright AFP (Agence France-Presse), 2011