Dollar jumps ahead of Fed meeting

By Associated Press
Posted Aug. 9, 2010 at 5:30 p.m.

The dollar jumped against major currencies Monday as markets expect the Federal Reserve to restart economic stimulus programs.

The central bank will likely leave its federal funds rate near zero at its meeting Tuesday, but could sound plans to resume purchasing mortgage-backed securities or buying Treasury bonds. The central bank’s programs ended earlier this year when it appeared the recovery was proceeding well.

The euro, which is used by 16 European countries, slipped to $1.3228 in late New York trading from $1.3277 late Monday. The British pound fell to $1.5898 from $1.5967, while the dollar edged up to 85.88 Japanese yen from 85.43 yen.

The pressure for the Fed to act rose Friday with the release of July’s disappointing jobs report. That reinforced worries about the U.S. economy at a time when markets have been more optimistic about the eurozone’s outlook.

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