The dollar weakened against major currencies on Friday as investors mulled the Federal Reserve's decision to buy another round of mortgage backed bonds until the US jobs market picks up.

On Thursday the central bank announced that it would buy $40bn in mortgage-backed securities each month until there's an improvement in US job market.

The Fed also said it would maintain ultra low interest rates for a "considerable time," after the US economy improves.

The dollar index, which measures the US unit against a basket of six currencies, declined to 78.864 compared to 79.254 on Thursday.

The euro rallied to $1.3122 versus $1.2992 the previous session after hitting an intra-day high of $1.3168.

Against the yen, the dollar rose to ¥78.35 from ¥77.49 on Thursday on speculation that Japan would soon take steps to weaken its currency after the yen rose to a seven-month high against the US currency on Thursday.

Speculation was prompted by comments by Japanese Finance Minister Jun Azumi that market intervention to cool the yen could be about to happen. The euro bought ¥102.815 against the yen versus ¥100.68 previously.

Sterling rose to a four-month high against the dollar on Friday after the Fed announced a fresh round of monetary stimulus. The pound bought $1.6230 from $1.6154 the previous day.

Sterling was down sharply against a broadly strong euro on Friday.

The Australian dollar climbed to $1.0615 before retreating to around $1.0558 from $1.0545 on Thursday.





CJ

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